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Twitter–What is your perception of this social media platform?

23 Oct

Twitter’s IPO, not Facebook’s, will define social

October 22, 2012: 6:54 AM

Too much has been made of Facebook’s botched offering. Here’s why Twitter’s will matter more.

By Don Reisinger, contributor

FORTUNE — The hype surrounding Facebook’s initial public offering in May was overwhelming. Nearly every investment bank was clamoring to get its hands on the company’s shares. Analysts were calling the event the defining moment of a new Internet IPO movement. After Facebook’s offering, some said, countless Web companies would join the stock frenzy and start offering their shares. Valhalla was in sight.

Unfortunately, reality hit. Like Icarus, Facebook’s share price tumbled down from its $38 opening price to around $20. There it has lingered. Naturally, other Web companies that might have gone public put their plans on ice. Perhaps worse, the IPO that was to be a clear clarion call defining a new Web era marked by massive growth in social networks, news aggregation, and location-based services. Instead,, Facebook’s IPO became a black mark. (Facebook will announce its second earnings this week.)

But there might just be a saving grace out there: Twitter.

At this point, Twitter has become one of the most important social networks on the Web. The site doesn’t have Facebook’s 1 billion users, but it has cemented itself as global, always-on, always-active global forum. Consider this: When Osama Bin Laden was killed last year, it was a Twitter user in Pakistan that broke the news first. Examples like this abound.

All of that has helped Twitter usage soar. In May, Pew found that overall usage has doubled over the last two years, with 15% of all online users surfing to Twitter. Just a month later, Twitter CEO Dick Costolo revealed that his company had hit 400 million tweets per day, up from 200 million just 11 months earlier. That growth has prompted financial gains, even as the company’s revenue model remains a work in progress. According to research firm eMarketer, Twitter’s revenue will likely hit $288.3 million this year, and then jump to $545.2 million in 2013. By the end of 2014, the figure will soar to $807.5 million.

Unlike Facebook, Twitter has found a way to monetize mobile users. So-called sponsored Tweets — messages paid for by advertisers — are more easily present on tiny cell phones screens. By 2014, it could generate $444.1 million from smartphones and tablets, according to eMarketer. In contrast, Facebook’s plan to make money from mobile users has not convinced investors. Twitter doesn’t rely on other social companies to generate a large chunk of its revenue the way another once-hot stock Zynga did. (Its woes are another matter.)

Ultimately, that is why a Twitter might be the validation this generation of Web companies need. The site has the same public appeal as Facebook, with a better — if smaller — financial yarn to spin investors.

The niggling problem? Twitter seemingly has no desire to go public. In a host of interviews over the last several months, Twitter’s top executives have said that they don’t see an IPO in the near future. Earlier this year, in fact, Twitter CEO Dick Costolo told Bloomberg that his company’s IPO is still “way out.” He echoed that sentiment in September, telling CNBC in an interview that Twitter has “every hope and belief that we will be a successful — independent — company.”

It will happen some day. Early backers and employees alike are attracted to startups by possibly lucrative equity. An IPO is the best way to cash out. Twitter has received significant venture-capital investment — over $1 billion at last count.  When that happens, expect a different scenario to play out than that what happened with Facebook. Twitter has a more stable business model that combines heavy usage with strong user engagement. The social network is woven into the events of the day, and doesn’t rely so heavily on partners to succeed.  Facebook might get all of the attention as the world’s largest social network. But it might just be Twitter that comes to define this wave of Web IPOs.

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7 Comments

Posted by on October 23, 2012 in Uncategorized

 

7 responses to “Twitter–What is your perception of this social media platform?

  1. countrygirl895

    October 25, 2012 at 1:57 am

    It’s a nice idea, Twitter being around forever and sparking the industry for successful use of Web IPOs. I hate to break it to the world, but Twitter will someday be replaced by another, more “hip” social networking sight. The nature of the industry is to be replaced by whatever the next up and coming website is. Even though Twitter is easily the most popular social networking site now, that’s bound to change, Myspace was that popular once too, as is (was) Facebook. Both of these sites had their creators/owners giddy with anticipation at the potential they held, but Myspace has turned into a thing of the past and FB is quickly following suit. If Twitter does decide to have stock, it will eventually fall, just as FB’s did. It is an inevitable part of being involved in a world of changing consumers with short attention spans.

     
    • raerae16

      October 25, 2012 at 2:55 pm

      I agree that Twitter will be replaced, just as it was the replacement for Facebook. People will continue to use the next best way to get their words out their, or just to stay in with their circle of friends. I think the focus on Facebook, Twitter, who is using what, and how much money it is making; really just defeats the entire reason people decide to participate in social media. They don’t care about what their participation means to the world, just what they are doing/experiencing/concerned with. The key to social media isn’t how it is being presented, but what information people choose to support. It’s not about the how, it’s about the what. All other concerns don’t really make a difference to people who use social media.

       
  2. raerae16

    October 25, 2012 at 2:50 pm

    The popularity of social networks does not depend on it’s ability to make money. In fact, one of the most appealing aspects that users find with social media is the “free” aspect. Free of charge, free of ads, free to speak freely. The competition within social media does not lie within profit, it lies with in the ability for everyone to become a “trend setter”. Some people use social media to gain recognition by their ‘followers.’The more followers you obtain, the more people value what you are saying or doing. It is our generation’s attempt at being ‘valued,’ and the last thing on our minds is the stock value. If anything was changed by Facebook becoming public, it was that it began to lose it’s appeal by basically saying “We want to make money off of your ideas and trends.”

     
  3. bananas320

    October 26, 2012 at 2:16 am

    I agree with both viewpoints listed above. Yes twitter will phase out and become less than titilating in a few years, maybe more maybe less. It can’t be argued that the twitter platform is a nearly uncontrollable source of free speech, and it is also the first social media website of its kind. Facebook may have become the dominant social profile site, but MySpace had a very similar layout and style. Twitter, with its instant microblogging being the main appeal, and the ability to follow important figures in society today is also a great attraction. However, if Twitter begins to spackle its sidebars with ads and clickthroughs, it may begin to lose its personal aura that it has grown so famous for. I know that I personally log onto youtube far less these days for recreation, now that I have to sit through ads most of the time.

     
  4. tex2524

    October 30, 2012 at 6:51 pm

    Personally, i feel as if Twitter just as myspace did and as Facebook is slowly beginning to will eventutally fizzle out and succumb to the next, most fascinating, convienent social networking method out there. However I agree with the comment above that twitter is the first social newtowrking site of it’s kind. It allows people that have followers to have a sense of “value” in what they say. I completely agree with the fact that twitter gives people an oppurtunity and a chance to become those “trend setters” that many people set out to be. If this oppurtunity to voice our opinion is accompanied by advertisements and clickthroughs than yes Twitter will begin to slowly crumble. Until then, I feel as if Twitter will continue to go through an extended period of prolonged prosperity and success.

     
  5. traveler012

    October 30, 2012 at 11:20 pm

    I personally love Twitter and can not even stand to be on Facebook anymore. I can not say much about MySpace (I wasn’t allowed to have one) but I can say that Facebook fell from grace, and Twitter took over. But as tex2524 stated, it will soon be “old news” and we will all be on to something new; myself included. I don’t mind the advertisements on Twitter at all. They’re a part of social networking. Just like pop ups on Facebook and the internet, or commercials on TV. I don’t think that TV has taken much of a hit for commercials nor did Facebook fall apart because of pop ups, considering that those happen no matter what website you are on. I agree they’re annoying, but will they make or break Twitter? No.

     
  6. sony112

    December 14, 2012 at 10:07 am

    I’m generally tired of social networks. I see them collapsing within the next 5 years and becoming a thing of the past. Myspace has fallen off significantly, i see the same eventual ending for all social networking sites.

     

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