Twitter Chirps About Google Deal, Yelp’s E-Commerce Future

Twitter didn’t divulge details about its payments or commerce strategy during the company’s fourth-quarter earnings call yesterday (Feb. 5) — even when questioned by an analyst. But the social media company that’s slowly making its name in the payments space did generate some buzz about its latest deal with Google.

Twitter posted a strong quarter as revenue nearly doubled to $479 million from $243 million from last year’s Q4, but its overall user base is still lagging behind what’s expected, recording 288 million monthly active users in the last quarter. Facebook has more than a billion users, which owns Instagram that also has more than 300 million users. But Twitter’s Google deal could change that.

Not many details of the agreement with the search engine company were revealed in the earnings call, as Twitter CEO Dick Costolo and CFO Twitter CFO Anthony Noto said the company wasn’t reveling the terms of the deal just yet. What he did indicate is that the deal with involve brining Twitter’s tweets in real time to Google’s search results.

“I do want to confirm that we have a relationship that we’ve agreed to with Google—I don’t have any more details to share about it at this time,” Costolo said.

Twitter’s executives were questioned once about Twitter’s plans to continue expanding its presence further into the payments and space — specifically about it’s pay-by-tweet or the platform’s Promoted Tweets feature with embedded links to push sales. While Twitter has dabbled with both on a small scale, the concept hasn’t been implemented for widespread adoption yet. While Twitter has found a way to monetize twitter now more than in the past, there’s still questions on the table as to when, if ever, Twitter plans to make paying with a tweet a viable option for the masses. For now, Twitter’s Buy Now feature is being used to test out things like online ticket sales.

At the end of Q3 it looked like Twitter was ready to make some tweaks into its payments strategy, but even in October Costolo was vague about its plans, particularly how the CardSpring acquisition would fit into its overall commerce growth.

“The CardSpring acquisition is definitely related tying that team together around our ongoing commerce efforts. I wouldn’t extrapolate too much from what you’ve seen around the buy now button that we’ve launched on Twitter to any forward-looking expectations,” Costolo said. “We’re continuing to explore the way we think about in-the-moment commerce and now commerce and the different kinds of opportunities we see in that area and we’ll just continue to play around with exploration there and look at opportunities in that area as opposed to what thinking about what you’re seeing today as what we’re launching permanently.”

He also said during that time that Twitter would have “more information on our commerce direction in the future.” But it doesn’t appear that future is here yet. When it comes to its commerce strategy, Costolo continued to be vague in his remarks during the earnings call.

“We continue to experiment with buy now and offers and commerce on Twitter,” he said. “You may have seen some of the things we’re running during the Super Bowl of some of the people and events and groups participating in the Super Bowl and we don’t have anything new to add on top of that or don’t have anything additional to announce right now other than those continued experiments that we’re running.”

Turning to Yelp, which also reported Thursday (Feb. 5), e-commerce was also a topic of discussion — but like Twitter, it was brief. Yelp’s CFO Robert Krolik answered an analyst’s question about metrics around e-commerce monetization that’s coming through the Yelp Platform as it relates to revenue overtime, but his answer was also vague and din’t provide much insight into current or future plans.

“So in terms of the metrics around monetization [of] the platform, I mean, it’s fairly small. It actually lives in other revenue. And what we’re doing is we’re taking a share of what the partner is taking in. So it’s a kind of a piece of a piece. [We] Haven’t really shared what that amount is, but really the purpose of platform at this point is just to show advertisers that we do close the loop, that we do drive leads, and I think that’s going to be the measure of that business for the foreseeable future,” said Yelp CFO Robert Krolik.

“In terms of what can it grow to, it can grow to — it depends, I guess, I would say. It can become a larger and larger piece of the business overall long term, but actually, at this point, we’re really focused on local advertising, and what platform is all about is consumers. So it’s providing a consumer complete transaction. I find a place, want to transact, I transact and I’m done and I have a happy experience on Yelp.”

Overall, Yelp posted a mixed quarter — hitting estimates — with its first-ever annual profit, but user growth numbers have slowed. Yelp posted a net profit of $32.7 million, at hit a net income of $36.5 million for 2014. Net sales for Q4 were $109.9 million, up 56 percent from the prior quarter. Annual sales totaled $377.5 million. Net revenue for the start of 2015 is anticipated to land between $114-116 million and 2015 revenue is projected to hit between $538 million and $543 million.




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