SAN FRANCISCO -- Tweet this: Investors have high expectations for ads on Twitter, which will issue its first quarterly earnings report on Wednesday after a successful Wall Street debut in November.

The popular micro-blogging service is much smaller than Facebook -- in both users and revenue -- but analysts say Twitter is quickly emerging as a potential rival to the larger social network, especially in the booming business of mobile online advertising.

Analysts surveyed by Thomson Reuters are expecting Twitter to report a loss of 40 cents a share for the quarter that ended Dec. 31, or a loss of two cents a share after excluding one-time charges, on revenues of $218 million. They're also hoping CEO Dick Costolo will give some insight into the company's plans for 2014, when the company discusses its performance after the stock market closes Wednesday.

An earnings loss isn't surprising, since young companies traditionally spend heavily on expanding their infrastructure and granting stock options to new employees. Wall Street is much more focused on Twitter's revenue, which is fueled primarily from sales of mobile ads and is expected to nearly double from the $112 million Twitter reported for the same period a year earlier.

The company has introduced new features for users in recent months, as well as new programs designed to help advertisers reach targeted audiences and to demonstrate the effectiveness of Twitter ads. One new program, for example, lets online retailers track whether customers made a purchase after seeing an ad on Twitter.

Twitter's stock has soared more than 150 percent from its initial public offering price of $26 on Nov. 7, when the company raised $1.8 billion in the tech industry's most closely watched IPO since Facebook's rocky debut in 2012. Shares closed Tuesday at $66.32.

And while Twitter's user base may not be growing as fast as in the early years after the company started in 2006, analysts were expecting Twitter to report an increase from the 230 million monthly active users reported last fall.

Twitter's first earnings report will undoubtedly draw comparisons to Facebook, and that's a high bar considering the larger company issued a blockbuster report last week, based on its success in building a mobile ad business.

But unlike Facebook, which had virtually no mobile revenue when it went public in 2012, analysts say Twitter may be starting in a stronger position because it makes most of its money from selling sponsored messages, or "promoted tweets," that appear on users' smartphones and tablets.

"In a world that is rapidly transitioning to mobile platforms for the majority of everyday computing needs, Twitter already gets most of its revenue and users on a mobile basis," analyst Ben Schachter of Macquarie Research said in a recent report to investors.

Like its much larger rivals, Facebook and Google, Twitter appeals to advertisers by promising to deliver relevant messages to specific groups of users, based on their interests and online activities. Twitter users frequently post messages on all kinds of topics, which means advertisers can target individuals who use certain "key words" or similar terms.

Users also follow other Twitter members who are celebrities or experts in various fields. And Twitter has aggressively sought deals with TV advertisers, targeting users who tweet about their favorite programs.

"Twitter is inherently well-positioned for targeted advertisers," Wedge Partners analyst Martin Pyykkonen said.

Twitter may draw another advantage from Facebook's performance: Pyykkonen said in a research note Tuesday that the younger company should benefit because advertisers now have more confidence in social media and mobile advertising than they had when Facebook went public in 2012.

Still, some analysts -- including Schachter -- believe Twitter's stock is overpriced for its current performance. "While we are quite bullish" on Twitter's long-term potential, he warned, it may take time for the company to meet expectations.

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