DETROIT -- Twitter, looking for better proximity to car companies with hefty ad budgets, said Wednesday it will open an office in Detroit just as the city's elected leaders scramble to avoid bankruptcy or a state takeover.
The San Francisco social media firm has located an office in the Motor City following a notable financial recovery by General Motors, Ford and Chrysler from years of painful restructuring and depressed auto sales. Google (GOOG) made a big splash in Detroit a couple years ago when it opened offices in a nearby suburb.
Robert Weeks, a spokesman for Twitter, said the company will have a "handful" of employees in Detroit, and their efforts will be aimed at working with automotive brands and advertising agencies. He said the company is "happy to play a role in downtown Detroit's digital renaissance."
Twitter also has Midwest offices in Chicago and Cincinnati.
The expansion comes at a period when Twitter, founded in 2006, has aggressively sought to boost revenue by selling "promoted Tweets" after years of largely ignoring advertisers.
Promoted tweets are advertisements that are inserted in a user's stream of messages on Twitter - analogous to a Web page that features pop-up ads.
In recent months, Twitter
Detroit's Big 3 and their vast chain of suppliers and dealers spend billions annually on advertising. The companies also employ a vast arsenal of social media techniques, including heavy use of Facebook, in their attempt to court buyers.
Twitter plans to locate the office in Detroit's downtown district, near other businesses that have recently expanded, including insurance companies, investment firms and advertising agencies. Dan Gilbert, founder of Detroit-based Quicken Loans Inc, has been a major player behind attracting the interest of nonmanufacturing companies to Motown and was influential in bringing Twitter to Detroit instead of to a suburban location.
Unlike much of Detroit's city limits, known for blight, crime and a lack of sufficient city services, the downtown region stretching from the Detroit River up through the historic Woodward corridor is showing signs of economic revival.
Twitter's move comes as elected officials in Detroit and the state of Michigan rush to craft a financial fix to avoid running out of money next month. Detroit has been plagued by population decline and a shrinking in the business community, leading to revenue decline and financial crisis.
In order to lift revenue, Detroit's city council this week voted to double corporate income taxes, to 2 percent of income from 1 percent.
The Detroit auto industry, meanwhile, has rebounded in recent years following a half-decade of job cuts, red ink and several high-profile bankruptcies. A strong U.S. car market and healthier balance sheets have led to big profits at GM and Ford.
Automotive clients are known for having deep pockets and an appetite for creativity. However, vendors to car companies are subject to abrupt slowdowns caused by the cyclical nature of the global auto industry.