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Twitter’s IPO Showcases Chinese Growth Hurdles

Twitter's just-released initial public offering prospectus shows China is still an important deficit in its global growth strategy.

In Twitter's F-1 IPO statement, the company said it is raising USD1 billion, which is largely a pro forma number until the company calculates fees and eyes its roadshow. The company recorded USD317 million in revenue in 2012 and recorded USD254 million during the first six months of 2013.

But tucked away in the document are many mentions about China. Twitter says investors should be wary that "adoption of any laws or regulations that adversely affect the growth" could impact the company's top line. And Twitter says "For example, access to Twitter is blocked in China."

And Twitter says government interference is a challenge because "domestic Internet service providers in China have blocked access to Twitter, and other countries, including Iran, Libya, Pakistan and Syria, have intermittently restricted access to Twitter, and we believe that access to Twitter has been blocked in these countries primarily for political reasons."

Governments are the not the only growth hurdle. Twitter reports that "Sina Weibo in China, LINE in Japan and Kakao in South Korea… have expanded and may continue to expand their geographic footprint" and therefore handicap the company. In China, Sina's Weibo is also being quickly eclipsed by Tencent's Weixin, proving that competition will be profound for any Twitter entry.



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