Total Pageviews

Twitter Prices I.P.O. at $26 a Share

Twitter Prices I.P.O. at $26 a Share

Regis Duvignau/Reuters

Twitter said that it had 232 million monthly users in the third quarter.

San Francisco â€" Twitter, long protected in its Silicon Valley nest, is about to venture into the more unforgiving world of Wall Street.

Document Graphic

On Wednesday, Twitter set the price of its initial public offering at $26 a share, valuing the company at roughly $18 billion. Twitter shares are set to begin trading Thursday on the New York Stock Exchange.

With 70 million shares sold in the offering, Twitter raised $1.8 billion. The I.P.O.'s price, the subject of debate between the board and its underwriters up until late on Wednesday afternon, was above an already heightened price range, reflecting the strong demand for the company’s stock.

Twitter’s initial public offering is a sign of maturity for the social network known for its 140-character “tweets” and its dainty blue bird logo. Seven and a half years after its founding, the service has become an influential public forum, used by world leaders, dissidents, celebrities, megacorporations, small businesses and tens of millions of regular people who want to listen or join in the conversation.

But as Twitter makes the transition to a publicly traded company, investors have reason to be cautious: the micromessaging platform is having trouble attracting and retaining users.

For one thing, Twitter’s interface can be daunting to newcomers. A user has to invest a lot of time to figure out the right accounts to follow and to understand the unique jargon of the service.

And its fundamental design â€" every tweet is delivered in chronological order, no matter how important or trivial â€" means that compelling information can get lost in a sea of babble.

“You see the stream of posts coming at you, and it’s really overwhelming,” said Debra Aho Williamson, a principal analyst who studies Twitter and other social media for eMarketer, a research firm. “It’s all jumbled.”

Rethinking the design of the service has been a lower priority for Twitter’s leadership team, which has focused more on the technical challenges of running the service and on creating sources of revenue, according to current and former Twitter employees. At the same time, the company has no obvious product visionary like the late Apple chief executive, Steve Jobs, to reimagine what the service could or should be to attract new users.

Richard Greenfield, an analyst with BTIG Research, said Twitter drew people during breaking news events, like Monday night’s shooting at a New Jersey mall, but needed to do a better job helping people find topics they were interested in so they returned frequently.

“The challenge is to prevent that person from waiting for the next event to come back,” said Mr. Greenfield. “How do you move that dormant user to every day, or multiple times a day, or every minute?”

Twitter’s slowing user growth, as well as its rising losses, has made for unfavorable comparisons with Facebook, the world’s largest social network, where about 1.2 billion people used the service at least once a month in the third quarter.

Twitter had 232 million monthly users during the same period. That was up just 14 million, or 6.4 percent, from the previous quarter â€" a much slower growth rate than Facebook had when it was the same size.

Twitter declined to make any executives available for this article, citing regulatory restrictions on public statements around the I.P.O.

Unlike Facebook, which is constantly tweaking its interface to make it easy to share and “like” things, Twitter is proudly, almost defiantly, geeky.

Users see an unfiltered flow of text messages, most recent first, filled with @ and # symbols and abbreviations like RT, MT and HT. Everything is treated the same -- a tornado alert from the Weather Channel, a joke from Jerry Seinfeld and a recipe shared by a friend down the street.

And the conventions of the service make reading tweets like deciphering code.

Take this recent Friday-night message from the San Francisco dining blog Eater SF: “EaterWire: last Fort Mason @otgsf tonight, @KronnerBurger at @TheMillSF tomorrow, @SpruceSF starts brunch Sunday: http://eater.cc/17jwNXR.”

Michael J. de la Merced contributed reporting from New York.

\n \n\n'; } s += '\n\n\n'; document.write(s); return; } google_ad_output = 'js'; google_max_num_ads = '3'; google_ad_client = 'nytimes_blogs'; google_safe = 'high'; google_targeting = 'site_content'; google_hints = nyt_google_hints; google_ad_channel = nyt_google_ad_channel; if (window.nyt_google_count) { google_skip = nyt_google_count; } // -->