By Sneha Shankar - Twitter Inc. plans to set up an office in Hong Kong early next year to help the microblogging site boost advertising revenues from companies in the region. The move comes despite the service, along with other social networking sites, being banned by China since 2009.
The California-based company plans to use its Hong Kong office to run sales operations, and will set shop by the first quarter of 2015. Nearly 77 percent of Twitter’s 284 million users are outside the U.S. but they contribute only 34 percent of total revenues. Twitter, which already has an office in Singapore, Seoul, Tokyo and Sydney in the Asia Pacific region, will be competing with Google and Facebook in Hong Kong, who also have offices there.
"Our upcoming Hong Kong office in the first quarter will enable us to pursue strategic opportunities in Greater China, such as China export advertising market, Hong Kong and Taiwan advertising markets, media partnerships, and our new Twitter Fabric integrated with MoPub for mobile developers," a spokesperson for Twitter told BBC, adding: “With half of all internet, mobile and social media users worldwide in Asia today, we see many opportunities across the region."
Twitter also plans to open an office in Jakarta to work more closely with advertisers and marketers there. Analysts expect that a presence in the Indonesian market will provide a significant boost to the company’s profits from advertising.
When asked if the move was a portrayal of the company’s eagerness to enter the Chinese market, Shailesh Rao, Twitter’s vice president for Asia Pacific, the Americas and emerging markets, said: “We would love to have Twitter” reach users “everywhere in the world including China,” according to The Wall Street Journal, adding: “Unfortunately, we can’t. That’s not our choice. We don’t control that decision.”
The company’s user base increased by 23 percent but timeline views per user -- a measure of how engaged users are on the site -- fell 7 percent in the third quarter of 2014, and the company expects fourth quarter revenue also to fall short of expectations.
“The real main focus of the office will be sales,” Rao said, according to the Journal, adding: “Building sales capability to work with agencies and advertisers domestically in Hong Kong and Taiwan and those Chinese advertisers looking to go global.”
Twitter’s shares have fallen nearly 36 percent this year.