Twitter Inc. (NYSE:TWTR) is expected to price its highly anticipated initial public offering by Wednesday, and demand for a stake in the social media platform is already enormous. Recent regulatory filings show that the company had planned on offering 70 million shares between $17 and $20 each, but reports suggest that the price could be increased before the debut to a range as high as $23 to $25 per share because — to put it one way — Twitter is just way too sexy for its shirt.

By shirt, of course, we mean the initial price range of the offering, which was thought to be relatively modest from the beginning. And by sexy, we mean attractive in an “don’t take it personally, but I only like you as an investment” kind of way.

Twitter has exercised extreme caution during the buildup to its initial public offering. In the eyes of many potential investors, the company falls into the same category of technology and Internet startups that Facebook Inc. (NASDAQ:FB), and, as a result, carries some of the same baggage. The platform is popular, but is it profitable? Revenues are increasing, but are they growing sustainably? Can mobile be monetized?

So aside from the hype of the company simply being cool, why is Twitter’s IPO attracting so much attention? Let’s take a look under the hood.

Twitter breaks its revenue down into two streams, advertising services and data licensing. For the year ended 2012, Twitter pulled in $316.9 million in revenue, $269.4 million of which (85 percent) was from advertising and $47.5 million of which (15 percent) was from data licensing. This is a very different mix from 2011, when Twitter pulled in $106.3 million in revenue, $77.7 million of which (73 percent) was from advertising and $28.6 million of which (27 percent) was from data licensing. In 2010, this mix was 26 percent advertising and 74 percent data licensing.

The evolution of the revenue split shows that Twitter was able to monetize much earlier as a data provider than it was as an advertiser. Businesses eager to tap, analyze, and capitalize on the torrents of social data that Twitter users produced expressed an interest in the company much earlier than advertisers and will continue to do so moving into the future. Data licensing revenue grew 36 percent in 2011 and 66 percent in 2012, and while it is destined to be dwarfed by ad revenue, it should not be forgotten.

Here’s an example: Acquisitions like social-television analysis firm Trendrr show that the company is looking to serve as the middleman between its users and businesses wherever possible. Social TV is, for lack of a better term, a thing — according to Nielsen, nearly half of TV watchers use either Facebook or Twitter while watching television. There is enormous value for content producers in understanding what viewers are saying about their shows, particularly in real time.

Brands and businesses want to be placed in front of users, yes, but they also want to understand what those users are saying. Recognizing this, there is an opportunity for Twitter to do business and continue to grow its data licensing revenues. As of the June quarter, data licensing revenue was up 62.9 percent on the year at $18.3 million, or 13 percent of total revenue.

Advertising, though, is the cash cow. As Twitter’s user base increased and it fine-tuned its platform and built relationships with brands and businesses, ad revenue has exploded. Ad revenue grew 961 percent in 2011 to $77.7 million and by 247 percent in 2012 to $269.4 million. As of the third quarter, ad revenue was up 113 percent on the year at $121 million, or 87 percent of total revenue. This means that Twitter’s largest revenue stream is also growing the fastest.

This makes consideration of Twitter’s strength as an ad platform and the risks facing its ad platform paramount.

Twitter’s major advertising products are its three “promoted” products: Promoted Tweets, Promoted Accounts, and Promoted Trends. Twitter described its value proposition to advertisers in the context of what makes Twitter unique as a social platform. For example, Twitter offers “ad formats native to the user experience” — promoted tweets — that fall more or less seamlessly into a user’s timeline and achieve a natural feel that Facebook has spent years trying to pin down.

Twitter also offers advertisers a level of real-time advertising that Facebook also has trouble matching. The ability of Twitter to serve as the go-to platform for live information is a huge value for users, advertisers, and data partners, according to the company.

Twitter reports that it expects the worldwide online advertising market excluding mobile to increase from $91.1 billion in 2012 to $124.7 billion in 2017. It expects the mobile advertising market to increase from $10 billion to $52.2 billion, and it expects to be a leader in this category.

Twitter reported in its S-1 that “over 65% of our advertising revenue was generated from mobile devices. We expect that the proportion of active users on, and advertising revenue generated from, mobile devices, will continue to grow in the near term.”

Twitter said it had 232 million monthly active users in in September, up from 167 million a year ago. Timeline views — a measure of engagement, or use of the platform — increased about 50 percent to nearly 159 billion in September, with an average revenue per 1,000 timeline views of 97 cents, up from 80 cents in June and 65 cents in the year-ago period.

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