twitter – what future? what strategic path to follow?

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The Case Study of Twitter – What future? What strategic path to follow? Module – Entrepreneurship Date: 28Oct2010

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Twitter, described as being an easy-to-use, micro-blogging application, instant messenger or social presence notifier and, essentially, as being a broadcasting system that allows users to transmit short bursts of information to lots of strangers, as well as, to friends, has been in the news as one of the “hottest technology companies since Google and Facebook” (source: The Entrepreneurs at Twitter: Building a Brand, a Social Tool or a Tech Powerhouse?, found at https://campus.college.ch/download/assignment/2560). It also has been viewed as an influential factor in socio-political events, such as (and as mentioned on the given article) Senator Barack Obama’s United States (U.S.) presidential campaign, as well as, in political protests in Iran. Despite its astonishing breakthrough into the Market (together with a strong crescent curve growth), by the end of 2009, Twitter had fallen to 24 million users worldwide (when, by mid-2009, the number was up to 29 million) . These figures made analysts wonder and discuss whether this sudden drop in users within only 6 months was indeed a blip or whether it revealed that Twitter needed a dramatic shift in its marketing strategy. Equally, many came to wonder how a company like Twitter was planning to survive in the long term (having such strong competitors in its market segment, namely, Facebook). The question, then, that one (any interested observer/analyst on the Twitter case) must bear in mind is how should a company like Twitter face the future when thinking about a strategy that may support its sustained growth and shield itself from the eagerness of its competitors. The pertinent question/discussion should be around the following: being a company that has raised a total of $155 million from a consortium of investors in several rounds of funding – without having earned a single cent of profit – and valued at US$1 billion following its latest round of funding , should Twitter finally make a dramatic shift on its approach towards the business itself? In other words, should the company adopt a moneymaking business model? May it be a real business opportunity? Does, in reality, Twitter have the necessary potential to attain such model? Can Twitter ever earn profits? Or, contrarily, should Twitter be looked as a mere bright social network tool? What are the options under stake? What plans to follow? There is one certainty, for sure: Twitter’s entrepreneurs face a dilemma. Should they redirect their strengths towards building a real Twitter Brand (a much market approach with a strong money-making business paradigm), or should the model remain as it is for now (a Social Tool, without much preoccupation on making money out of it)? On the following pages, then, I will try to grasp all of these questions and foresee what strategy (based, and solely, on the information provided in the case study article) I reckon to be the best and most appropriate for Twitter to implement.

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Page 1: Twitter – What future? What strategic path to follow?

T h e   C a s e   S t u d y   o f   Tw i t t e r   –  Wh a t  f u t u r e ?  Wh a t   s t r a t e g i c   p a t h   t o   f o l l ow ?  

                 

                         

                 Module  –  Entrepreneurship                                                                                                                                        Date:  28-­‐Oct-­‐2010  

 

 

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“A   product   is   a   physical   thing...   the   brand   has   not  tangible,  physical  nor  functional  properties  ...  yet,  it  is  as  real  as  the  product.  If  separate,  abstract,  ephemeral...  it  exists  as  a  myth  in  the  imagination  of  the  consumer”    

Kim  

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Table  of  Contents  

 

 

 

 

Executive  Summary...................................................................................................4.  

 

Main  Report............................................................................................................. 5.  

 

Conclusion...............................................................................................................11.  

 

Bibliography ...........................................................................................................12.  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Executive  Summary  

Twitter,   described   as   being   an   easy-­‐to-­‐use,   micro-­‐blogging   application,   instant  messenger   or   social   presence   notifier1   and,   essentially,   as   being   a   broadcasting  system  that  allows  users  to  transmit  short  bursts  of  information  to  lots  of  strangers,  as   well   as,   to   friends,   has   been   in   the   news   as   one   of   the   “hottest   technology  companies   since   Google   and   Facebook”   (source:   The   Entrepreneurs   at   Twitter:  Building   a   Brand,   a   Social   Tool   or   a   Tech   Powerhouse?,   found   at  https://campus.college.ch/download/assignment/2560).   It   also  has  been  viewed  as  an  influential  factor  in  socio-­‐political  events,  such  as  (and  as  mentioned  on  the  given  article)  Senator  Barack  Obama’s  United  States   (U.S.)  presidential  campaign,  as  well  as,  in  political  protests  in  Iran.  

Despite   its   astonishing   breakthrough   into   the   Market   (together   with   a   strong  crescent   curve   growth),   by   the  end  of   2009,   Twitter  had   fallen   to  24  million  users  worldwide   (when,   by  mid-­‐2009,   the   number  was   up   to   29  million)2.   These   figures  made  analysts  wonder  and  discuss  whether  this  sudden  drop  in  users  within  only  6  months  was   indeed   a   blip   or  whether   it   revealed   that   Twitter   needed   a   dramatic  shift   in   its  marketing   strategy.  Equally,  many  came   to  wonder  how  a  company   like  Twitter  was  planning  to  survive  in  the  long  term  (having  such  strong  competitors  in  its  market  segment,  namely,  Facebook).  

The  question,   then,   that  one   (any   interested  observer/analyst  on   the  Twitter  case)  must   bear   in   mind   is   how   should   a   company   like   Twitter   face   the   future   when  thinking   about   a   strategy   that   may   support   its   sustained   growth   and   shield   itself  from  the  eagerness  of  its  competitors.  The  pertinent  question/discussion  should  be  around  the  following:  being  a  company  that  has  raised  a  total  of  $155  million  from  a  consortium   of   investors   in   several   rounds   of   funding   –   without   having   earned   a  single   cent   of   profit3   –   and   valued   at   US$1   billion   following   its   latest   round   of  funding4,   should  Twitter   finally  make  a  dramatic   shift  on   its   approach   towards   the  business  itself?  In  other  words,  should  the  company  adopt  a  moneymaking  business  model?  May   it   be   a   real   business   opportunity?   Does,   in   reality,   Twitter   have   the  necessary   potential   to   attain   such   model?   Can   Twitter   ever   earn   profits?   Or,  contrarily,  should  Twitter  be  looked  as  a  mere  bright  social  network  tool?  What  are  the   options   under   stake?  What   plans   to   follow?   There   is   one   certainty,   for   sure:  Twitter’s   entrepreneurs   face   a   dilemma.   Should   they   redirect   their   strengths  towards   building   a   real   Twitter   Brand   (a   much   market   approach   with   a   strong  money-­‐making  business  paradigm),  or   should   the  model   remain  as   it   is   for  now   (a  Social  Tool,  without  much  preoccupation  on  making  money  out  of  it)?  

On   the   following  pages,   then,   I  will   try   to  grasp  all  of   these  questions  and   foresee  what   strategy   (based,   and   solely,   on   the   information   provided   in   the   case   study  article)  I  reckon  to  be  the  best  and  most  appropriate  for  Twitter  to  implement.  

                                                                                                               1  http://dev.aol.com/article/2007/04/definitive-­‐guide-­‐to-­‐twitter  ,  accessed  October  25,  2010.  2  http://www.cnn.com/2010/TECH/01/26/has.twitter.peaked/index.html?hpt=C1  ,  accessed  October  25,  2010.  3  http://blog.pff.org/archives/2009/09/will_our_twitter_free_ride_end_or_will_targeted_ad.html  ,  accessed  October  25,  2010.  4  http://techcrunch.com/2009/09/16/twitter-­‐closing-­‐new-­‐venture-­‐round-­‐with-­‐1-­‐billion-­‐valuation/  ,  accessed  October  25,  2010.  

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Main  Report  

Is   Twitter   just   a   bright   idea  or   a   real   business   opportunity?   To  what   extent  does  Twitter’s  situation  in  2010  reflect  the  past  record  of  its  founders?  

Based  on  the  information  provided  by  the  text,  I  firmly  may  affirm  that  Twitter  may  turn  out   to  be  a   real  business  opportunity,  even   though,   there  are   some   troubling  threats  and  setbacks:    

a) Twitter’s  growth  had  peaked  in  July  2009  at  just  over  29  million  global  users  per   month,   falling   steadily   over   the   next   five   months   to   under   24   million  users  per  month  by  the  end  of  2009.5  

b) A   recent   research   undertaken   by   a   research   firm,   eMarketer,   estimated  Twitter’s  abandonment  rate  to  be  60  per  cent  after  the  first  month.6  

c) Eager  competitors  have  already  started  to  emerge,  offering  functionality  that  was  unavailable  from  Twitter.  Examples:  Friendfeed  allows  users  to  send  text  messages,  as  well  as,  import  information  from  their  blogs,  Flickr  photos,  and  YouTube  videos.  Identi.ca,  another  micro-­‐blogging  service,  has  already  made  its   source   code   freely   available,   allowing   users   to   create   their   own  micro-­‐blogging   service.   Present.ly,   which   is   designed   specifically   for   businesses,  allows  companies  to  create  their  own  micro-­‐blogging  network  on   its  service  and  separate  users  into  groups.7  

d) In   an   attempt   to   win   market   share   in   this   growing   space,   larger,   more  established  companies  have  already  rolled  out  free  services  as  well   (source:  The   Entrepreneurs   at   Twitter:   Building   a   Brand,   a   Social   Tool   or   a   Tech  Powerhouse?,   found   at  https://campus.college.ch/download/assignment/2560).  

e) In   2008,   Facebook   attempted   to   purchase   Twitter   for   $500   million   in  Facebook   stock,   but   Twitter’s   management   team   rejected   the   offer.   After  these  takeover  talks  were  abandoned,  Facebook  introduced  several  Twitter-­‐like   changes   to   its   service,   including   updating   users’   home   pages   to   allow  them   to   provide   real-­‐time   updates   to   friends.   Facebook   also   gave   more  visibility   to   its  pages   for   celebrities   and  other  high-­‐profile   figures   and   lifted  the   ceiling  on   the  maximum  number  of  online   fans   they   could  have  on   the  site  (source:  The  Entrepreneurs  at  Twitter:  Building  a  Brand,  a  Social  Tool  or  a  Tech   Powerhouse?,   found   at  https://campus.college.ch/download/assignment/2560).  

f) And,   in   early   February   2010,  Google   launched   a   Twitter   competitor   called  “Google  Buzz”,  which,  among  other  things,  allowed  users  to  post  updates  in  real  time  by  using  their  mobile  phones.8  

Despite  the  mentioned  list  of  setbacks  and  potential  real  threats,  why,  then,  am  I  so  affirmative  about  Twitter’s  potential  on  becoming  a  successful  business  opportunity  and  not   just   a  bright   idea   (that  has   its   days   counted)?   I   say   it   solely  based  on   the  numbers,  analysis  and  Exhibits  shown  on  the  case  study  article.  

                                                                                                               5  http://mashable.com/2010/01/11/twitter-­‐growth-­‐stats/  ,  accessed  October  25,  2010.  6  http://mashable.com/2009/09/14/twitter-­‐2009-­‐stats/  ,  accessed  October  25,  2010.  7  http://news.cnet.com/8301-­‐17939_109-­‐10120401-­‐2.html  ,  accessed  October  25,  2010.  8  http://news.cnet.com/8301-­‐30684_3-­‐10449662-­‐265.html,  accessed  October  25,  2010.  

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If  one  carefully  analyses  Tech  Crunch  financials  forecast9  on  Twitter,  one  may  clearly  become  optimistic  about  the  company’s  real  growth  potential  into  becoming  a  case  of  great  business  success.  Based  on  internal  documents,   it   is  evaluated  to  generate  US$4  million   in  revenues  by  the  end  of  2009,  and,  most  crucially,  US$62  million  by  the  end  of  2010  (nearly  7  times  more,  all  within  just  one  year  period).  

Thus,  and  solely  based  on  the  forecast  of  numbers,  one  may  become  quite  optimistic  about  Twitter  turning  out  to  be  a  real  profitable  company!  

Additionally,   one  must   bear   in  mind   that   about   50%  of   Twitter’s   user   base   comes  from   the   United   States10   (half   of   its   “audience”   is   solely   based   on   a   single  country/geographical   region).   And   what   does   this   information   means   to   me?   It  clearly  shows  me  that  Twitter’s  public  target  is  still  pretty  much  not  availed.  If  such  a  promising  profitable  company  has  half  of   its  potential  revenues  and  profits  coming  from   a   single   region   on   the   globe,   then,   one   must   wonder   how   much   would   it  generate  if  the  promising  business  could  reach  other  and  further  regions  around  the  globe!...   In   fact,   if   one   thinks   about   it,   the   true   potential   is   enormous!   I   now  understand   the   so   affirmative   account   by   Josh   Bernoff,   an   analyst   at   Forrester  Research:  

“By   the   end  of   2010,   Twitter  will   either   have  a   business  model   capable   of  generating   $100   million   in   revenue   or   it   will   get   bought.   This   is   not   a  company  whose  ambition  is  to  be  small  and  profitable.  They  are  looking  at  a  world  where  one  billion  people  are  Twittering.  You  have  to  be  able  to  make  money  from  that.”11  

This  current  (as  we  are  near  the  end  of  2010)  overall  potential  wouldn’t  be  possible  without   the   key   visionary   contribution   of   Twitter’s   founders.     Jack   Dorsey,  Christopher   Isaac   “Biz”   Stone   and,   mainly,   Evan   Williams   are   the   names   behind  Twitter’s   emergence.     I   would   say   that   their   entrepreneurship   qualities   are   the  source   for   the   current  optimistic   analysis  on  Twitter’s  performance   (again,  despite  some  numbers  showing  a  drop  on  its  global  users).  Particularly,  Evan  Williams!  If  one  takes  a  look  on  Williams’  past,  one  may  conclude  that  his  entrepreneur  spirit  made  him   to   be   where   he   is   today.     Having   dropped   from   University,   he   preferred   the  mental  challenge  of  coming  up  with  great  business  ideas.  Having  moved  from  job  to  job,  he  always  pursued  entrepreneurial  ideas  on  the  side,  even  though,  he  never  had  any  particular  success  on  any  of  his  early  projects.  But,  he  never  quitted  and  moved  right   after   to   a  more  alluring   idea  emerged12.     In  other  words,   he  was   the   kind  of  person  who  never  quitted  from  pursing  a  better  and  more  promising  entrepreneurial  idea.  His  past  jobs,  namely  within  the  marketing,  software  and  high-­‐tech  industries,  made  him  the  successful  man  is  he  now.    

 

                                                                                                               9  http://www.techcrunch.com/2009/07/15/twitters-­‐financial-­‐forecast-­‐shows-­‐first-­‐revenue-­‐in-­‐q3-­‐1-­‐billion-­‐users-­‐  in-­‐2013/  ,  accessed  October  25,  2010.  10  http://www.cnn.com/2010/TECH/01/26/has.twitter.peaked/index.html?hpt=C1  ,  accessed  October  25,  2010.  11  http://www.marketwatch.com/story/teens-­‐arent-­‐into-­‐twitter-­‐but-­‐they-­‐love-­‐facebook-­‐2010-­‐02-­‐09?reflink=MW_news_stmp  ,  accessed  October  25,  2010.  12  The  Entrepreneurs  at  Twitter:  Building  a  Brand,  a  Social  Tool  or  a  Tech  Powerhouse?,  found  at  https://campus.college.ch/download/assignment/2560  

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But,   the   move   I   reckon   to   be   the   most   significant   shift   on   his   entrepreneurial  ascendency,   and   that   would   constitute   the   pre-­‐announcement   of   Twitter’s  breakthrough,   was   the   launch   of   a   podcasting   firm   named   Odeo,   Inc.   Podcasting  (another  visionary  project,  where  the  main  feature  was  the  practice  of  recording  and  releasing  digital  media   files  via  web).  Despite   this  promising  project,   in  early  2006,  Odeo  was  facing  poor  prospects  for  its  future.  And,  after  a  series  of  events,  Williams  (together   with   his   fellows   Stone   and   Dorsey)   decided   to   acquire   another   parallel  project   named   “Twttr”.     The   rebranding   of   the   project   was   the   next   step:   the  “Twitter”  project  was  born.  

In   one   sentence:   Williams’   (as   well   as,   Stone’s   and   Dorsey’s)   entrepreneurial  capabilities   and   constant   visionary   eagerness   for   brighter   ideas,   determinately  contributed  for  the  birth  and  consequent  success  of  Twitter.  

What   has   been   Twitter’s   marketing   approach   to   date?   What   should   its  marketing  approach  look  like   in  the  future?  Can  Twitter  ever  earn  profits?  If  so,  how  can  it  capitalize  on  its  popularity,  and  how  should  it  put  those  plans  into  action?  

Now,   the   success  of  Twitter   (just   like  any  other   successful  product/service)   cannot  (and   did   not)   rely   on   the   absence   of   an   effective   marketing   strategy.   Twitter’s  accomplishments  go  hand-­‐in-­‐hand  with  a  powerful  marketing  strategy  approach  and  means  to  reach  and  attain  the  maximum  attention/adhesion  from  its  public  target.  One  may   identify   7  main   stages   regarding   Twitter’s  marketing   approach,   since   its  foundation:  

1) During  the  first  six  months  of  Twitter’s  existence,  the  company  implemented  a  basic/poor  marketing  strategy  approach  –   it   relied  on   its  original  users   to  become  what  may  be  called  as  “personal  evangelists”  for  the  service.13  

2) Twitter’s   first   real   breakthrough   happened   following   a   bright   marketing  approach/action:  by  March  2007,   in  Austin,   at   South  by   Southwest   festival,  “participants  were  able  to  see  their  tweets  flash  across  television  screens  in  real   time.   The   number   of   tweets   tripled   to   60,000   per   day,   as   participants  talked   about   the   service   and   the   bloggers   in   attendance   wrote   about   it”  (source:   The   Entrepreneurs   at   Twitter:   Building   a   Brand,   a   Social   Tool   or   a  Tech   Powerhouse?,   found   at  https://campus.college.ch/download/assignment/2560).  

3) Following  and  building  on  the  success  at  South  by  Southwest,  Twitter  decided  to  add  extra  new  features   to   its  product,   such  as  RSS   feeds  and   integration  with   IM.   This   upgrading   on   the   product  meant   that   each   feature   that   was  added  boosted  the  number  of  users  and  usage  per  user.14  

4) Another   marking   point   at   Twitter’s   successful   marketing   accomplishments  was  when  its  service  began  to  be  mentioned  by  numerous  times  in  the  media  (a  key  marketing  platform)  –  between  2007  and  late  2009.15  

                                                                                                               13  The  Entrepreneurs  at  Twitter:  Building  a  Brand,  a  Social  Tool  or  a  Tech  Powerhouse?,  found  at  https://campus.college.ch/download/assignment/2560  14  http://www.140characters.com/2009/01/30/how-twitter-was-born/ , accessed  October  25,  2010.  15  The  Entrepreneurs  at  Twitter:  Building  a  Brand,  a  Social  Tool  or  a  Tech  Powerhouse?,  found  at  https://campus.college.ch/download/assignment/2560  

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5) A   fifth   stage   may   be   identified   as   when   Twitter   had   managed   to   reach   a  strong   and   powerful   segment   of   its   public   target:   other  organizations/companies.  These  began  to  take  note  of  Twitter’s  potential  to  reach   out   to   a   more   technologically   savvy   audience.   The   service   was  especially  valuable  to  small  companies,  with  limited  budgets,  looking  to  gain  recognition   in   the  marketplace.  With  Twitter,   these   small   firms  could   reach  out   and   provide   updates   to   a   growing   list   of   followers.   Within   larger  organizations,   there   was   the   potential   for   managers   to   update   and   co-­‐ordinate   groups   of   employees.   However,   managers   were   aware   of   the  downside   as  well   –   employees   could   be   spending   unnecessary   amounts   of  time  on  the  service.  

6) Another   remarkable  achievement/conquest   (if   not   the  most  notorious  one)  may  be  identified  as  being  when  Twitter  gained  in  usage  during  the  2008  U.S.  presidential  campaign  and  was  cited  as  a  key  tool  during  the  2008  attacks  in  Mumbai,  India.    

Also,  during   the   Iranian  presidential   election,   the  popularity  of   Twitter   as   a  tool  used  by  protesters  grew;  participants  relied  on  the  service  to  co-­‐ordinate  their  movements  and  to  send  message  to  the  world  outside  Iran.  Reliance  on  the   service   grew   to   such   a   point   that   Twitter   delayed   a   90-­‐minute  maintenance  shutdown  following  a  request  from  the  U.S.  State  Department  to  keep  the  service  available  for  the  Iranian  protesters.16  

7) Finally,   over   the   last   2   years,   Twitter   has   managed   to   constantly   be  mentioned   and   advertised   in   the  media.   To   name   a   few   accomplishments,  and   during   2009,   there   were   publicity   stunts   initiated   by   users,   such   as  Ashton  Kutcher’s  challenge  to  CNN  in  a  “Twitter  popularity  contest”17  and  a  Twitter   name   charity   auction   for   “@drew,”  which   attracted   a   US$1  million  bid  from  comedian  Drew  Carey  if  he  reached  one  million  followers  by  the  end  of  2009.18  

As  listed  and  described  above,  one  may  clearly  understand  that  Twitter’s  overall  marketing   strategy  has  been   to   try  and  be  at   the   core  of   key  notorious  events  (being   political   or   social).   Its   aim   is   to   be   among   the   people   (the   masses)  themselves.   Explore   the   word-­‐of-­‐mouth   factor   and   potentiate   the   enormous  opportunity  that  modern  media  platforms  (namely,  television)  may  represent  to  help   the   company   to  promote   its  product/service.   It’s   clear   to  me   that   Twitter  has  no  limitations  regarding  its  public  target.  It  wants  to  reach  as  much  public  as  possible   (being   a   mere   citizen   or   other   identities,   such   as,   organizations,  corporations  and  companies).  

                                                                                                               16  Andrew LaVallee, (2009-06-15). “Web Users in Iran Reach Overseas for Proxies,” The Wall Street Journal, http://blogs.wsj.com/digits/2009/06/15/web-users-in-iran-reach-overseas-for-proxies/ , accessed  October  25,  2010; and Mike Musgrove, (2009-06-17), “Twitter Is a Player In Iran's Drama,” The Washington Post, http://www.washingtonpost.com/wp- dyn/content/article/2009/06/16/AR2009061603391.html?hpid=topnews , accessed  October  25,  2010.  17  http://www.cnn.com/2009/TECH/04/15/ashton.cnn.twitter.battle/index.html , accessed  October  25,  2010.  18  http://mashable.com/2009/10/07/drew-carey-twitter-bid/, accessed  October  25,  2010.  

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Twitter’s   Brand  has   become,   then,   a   remarkable   one   and   I   sense   (after   having  read  and  analyzed  this  case  study)  that  its  potential  has  not  yet  been  explored  to  its  limitations!  

What   marketing   approach   should   Twitter,   then,   follow   in   the   years   ahead,  knowing  that  its  potential  (both  in  terms  of  reaching  further  “audiences”  and  in  turning  into  a  money-­‐making  business)  is  reckoned  to  be  an  undoubtedly  reality?  

Well,  first  of  all  it  certainly  must  try  and  maintain  (and  even  improve)  the  level  of  exposure   it   currently   has   on   the   media.   Virtually,   anyone   now   knows   what  Twitter  is,  how  and  where  can  it  be  found  (despite,  as  interpreted  from  the  given  article,  one  may  speculate  that  it  still  has  other  markets/regions  in  the  globe  to  exhibit   itself).   It’s  already  on  the  spot,  so  to  speak.  The   lights  are  already  on   it!  So,  the  first  thing  to  do  is  to  try  and  explore  that  already  given  fact.  Being  on  the  news  and,  constantly,  being  quoted  and  used  as  an   innovation  tool   for  modern  communication   (being  a   fast,   intuitive  and  easy  communication  platform)  must  be  the  key  message  to  pass  on  to  its  targeted  audience).  

In   my   account,   Twitter   has   the   true   potential   to   not   just   be   an   extraordinary  social  tool  (as  it  has  been  for  the  time  being),  but  also  a  set  of  features  that  may  make   it   a   real   “branding”   opportunity   for   its   entrepreneurs/founders.   To   be  more  precise,   I  would   say   that   their  entrepreneurs   should  move  onto   the  next  big  step  and  reinvent  its  marketing  strategy  and  look  at  Twitter  as  what  I  would  call  the  “brand  for  modern  communication”.  In  my  view,  this  message  should  be  the  one  around  which  the  next  ventures  should  be  inspired  by.    

There   is  no   turn  around  on  The  Modern  Communications  Era   (some  also   call   it  the  Network  Society19).   It’s  a  given   fact   that,   in  modern   times,   information  and  money   flow   more   quickly   than   ever   and   international   communication   is  commonplace.  So,  as  Twitter  is  already  in  the  midst  of  such  phenomena,  the  only  way   I   see   for   the   product   (the   company   itself)   to   survive   and   indeed   try   and  make   the  most   of   the   current   tendencies   is   to   improve   its  marketing   strategy  into  a  much  “Branding”  one.  And,  by   that,   I  mean   that  Twitter  needs   to  brand  itself   into  a  real  product  that  may  be  used,  but  also  bought  by  true  consumers.  Yes,  it  mustn’t  drop  out  from  being  a  remarkable  social  or  political  tool  (take  the  extreme   examples   of   Barack   Obama’s   U.S.   presidential   campaign   or   even   the  political  protests  in  Iran).  But,  my  perception  is  that  this  outstanding  feature  may  well  go  hand-­‐in-­‐hand  with  a  another  way  of  seeing  current  times  and  needs  the  company  may   have   to   begin   to   raise   profits   and   revenues   –   a  money  making  business  model,  as  well.    

Twitter  may  well   follow   a   new  path  on   its   trajectory:   a   two  way  of   seeing   the  business  itself.  On  one  side,  maintain  and  even  reinforce  its  positive  position  as  a  social  tool/product  that  may  be  used  by  virtually  anyone  (without  having  to  pay  anything   for   it).  On   the  other   side,   a  parallel   a  new   track,  where   the   company  may  also  have  the  opportunity  to  make  money  out  of  the  all  idea.  

                                                                                                               19  Castells,  Manuel  (1996)  The  Rise  of  the  Network  Society.  Cambridge:  Blackwell.    

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Now,   to   accomplish   that   (the   profitable   paradigm),   Twitter   surely  must   target  other  markets  and  segments  of  consumers  (I  refer  to  much  complex  audiences,  such   as   large   corporations   and   organizations).   These   are   the   consumer   targets  Twitter   should   look   at   in   order   to   make   money   out   of   the   business   it   runs  (through   pay   per   use,   for   example).   And   these   groups   of   consumers   are   still  pretty  much  unexplored  by  Twitter.   Its  marketing  strategy  must,  then,  focus  on  trying  to  penetrate  into  these  potential  new  consumers.  

A   huge,   but   committed   effort  must   be   done   on   applying   key  marketing   tools,  such   as,   publicity   stunts   and   strong   advertisement   on   the   media   (television,  radio,  internet,  etc).  The  new  product,  as  I  would  call   it,  should  be  promoted  as  being  a  two  vector  service:  a)  directed  to  the  common  user/consumer  (on  a  free  access  stream;  and  b)  directed  to  a  more  specific  consumer  segment,  where  the  usage  of  the  service  must  be  paid.  

Twitter  needs   to   capitalize  on   its  popularity  and  put   into  action  a   set  of  plans!  What   plans   are   these?   Surely,   it   must   focus   on   getting   the   highest   number  possible  of  new  potential  users/consumers.  And  these  will  be  the  ones  who  will  support   the   desired   earning   of   profits!   As  mentioned   on   the   given   article,   the  potential  targets  are  as  follows:  

A  more  technological  savvy  audience.  These  may  be  divided  into  two  sub-­‐segments:   1   –   Small   companies,   with   limited   budgets,   looking   to   gain  recognition  in  the  marketplace  (even  though  it  is  not  a  new  segment  for  Twitter   to   capture,   as   it   already   is   one   of   twitter’s   user   segments,   it  should,  nevertheless,  be  one   target   to  develop  and  get   the  most  out  of  it);  2  –  Larger  companies,  with  the  potential  for  managers  to  update  and  co-­‐ordinate  groups  of  employees.  

Commerce-­‐based  search  businesses  (e-­‐commerce  segment).  

To   quote   Ellen   Siminoff,   a   former   Yahoo!   Inc.   executive   who   co-­‐founded  education  the  website  Shmoop  University  Inc.:  “Where  you  have  audiences,  you  will  make  money.”20.  And  this  is  what  Twitter  must  do.  Building  on  its  popularity,  it  should  seek  for  further  audiences,  as  well  as,  try  to  re-­‐enforce  the  liaison  with  the  existing  users/consumers.  

 

 

 

 

 

                                                                                                               20  http://www.bloomberg.com/apps/news?pid=20601087&sid=aPAHFu.jBrhM  

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Conclusion  

What   should   entrepreneurs   at   Twitter   do?   Take   its   product   and   try   to   build   a  tremendous  Brand  out  of   it   (the   company  was   valued   at  US$1  billion   following   its  latest   round   of   funding21;   it   is   estimated   that   its   users  may   rise   up   to   1   billion   by  2013;  and   it  has  an  ambitious  goal  of  earning  over  $1  billion   in  net   income  also  by  2013)?  Or,  should  they  disregard  it  and  maintain  the  current  situation  of  being  just  a  “mere”  network  tool  for  consumers  to  use  it  freely?  

My   answer   is   that   Twitter   should   build   a   two-­‐way   track   (in   parallel   coordinates),  where   twitter   maybe   used   as   a   social-­‐networking   toll,   but   also   as   a   way   where  certain   consumers   (much   complex   audiences,   such   as   large   corporations   and  organizations)  must  pay  for  it  in  order  to  use  it.  

On  the  contrary,  if  Twitter’s  entrepreneurs  do  not  seek  this  vision,  many  argue  that  the  company  may  end  up  by  being  bought.  As  argued  by  Josh  Bernoff  (and  I  strongly  agree   with   him),   a   company   that   has   the   potential   of   having   a   business   model  capable   of   generating   $100   million   in   revenue   and   the   fact   that   the   number   of  people   twittering  may   rise   up   to   one   billion,   cannot   simply   be   ignored!   Bernoff’s  words   sound   clear   as   water   to   me:   “You   have   to   be   able   to   make   money   from  that!”22.  

 

 

                                     

                                                                                                               21  http://techcrunch.com/2009/09/16/twitter-closing-new-venture-round-with-1-billion-valuation/ , accessed  October  25,  2010.  22  http://www.marketwatch.com/story/teens-­‐arent-­‐into-­‐twitter-­‐but-­‐they-­‐love-­‐facebook-­‐2010-­‐02-­‐09?reflink=MW_news_stmp  ,  accessed  October  25,  2010.  

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Bibliography      Books    

- Castells,   Manuel,   1996.   The   Rise   of   the   Network   Society.   Cambridge:  Blackwell.  

- KIM,  Peter,  1990.  A  Perspective  on  Brands.   Journal  of  Consumer  Marketing.  Vol  7,  nº  3,  p.  63-­‐67.  

 Internet  Resources      

- Ashton  Kutcher  challenges  CNN  to  Twitter  popularity  contest  (Webpage)  Available   from:  http://edition.cnn.com/2009/TECH/04/15/ashton.cnn.twitter.battle/index.html    (accessed  Monday,  25.  October  2010).    

- Drew  Carey  Raises  Bid  to  $1  Million  for  @Drew  on  Twitter  (Webpage)  Available  from:  http://mashable.com/2009/10/07/drew-­‐carey-­‐twitter-­‐bid/  (accessed  Monday,  25.  October  2010).    

- 18  Million  Twitter  Users  by  End  of  2009  (Webpage)  Available  from:  http://mashable.com/2009/09/14/twitter-­‐2009-­‐stats/  (accessed  Monday,  25.  October  2010).    

- Google's  social  side  hopes  to  catch  some  Buzz  (Webpage)  Available  from:  http://news.cnet.com/8301-­‐30684_3-­‐10449662-­‐265.html  (accessed  Monday,  25.  October  2010).    

- Has  Twitter  peaked?  (Webpage)  Available  from:  http://www.cnn.com/2010/TECH/01/26/has.twitter.peaked/index.html?hpt=C1  (accessed  Monday,  25.  October  2010).    

- How  Twitter's  competitors  do  what  it  doesn't  (Webpage)  Available  from:  http://news.cnet.com/webware/?tag=rb_content;overviewHead  (accessed  Monday,  25.  October  2010).    

- How  Twitter  Was  Born  (Webpage)  Available  from:  http://www.140characters.com/2009/01/30/how-­‐twitter-­‐was-­‐born/  (accessed  Monday,  25.  October  2010).          

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- The  12-­‐Minute  Definitive  Guide  to  Twitter  (Webpage)  Available  from:  http://dev.aol.com/article/2007/04/definitive-­‐guide-­‐to-­‐twitter  (accessed  Monday,  25.  October  2010).    

- The   Entrepreneurs   at   Twitter:   Building   a   Brand,   a   Social   Tool   or   a   Tech  Powerhouse?  (Webpage)  Available  from:  https://campus.college.ch/download/assignment/2560  (accessed  Monday,  25.  October  2010).    

- The   Entrepreneurs   at   Twitter:   Building   a   Brand,   a   Social   Tool   or   a   Tech  Powerhouse?  (Webpage)  Available  from:  https://campus.college.ch/download/assignment/2560  (accessed  Monday,  25.  October  2010).    

- The  Washington  Post  (Webpage)  Available   from:   http://www.washingtonpost.com/wp-­‐%20dyn/content/article/2009/06/16/AR2009061603391.html?hpid=topnews  (accessed  Monday,  25.  October  2010).    

- The  Twitter  Flatline:  Why  Doesn’t  Twitter  Grow?  (Webpage)  Available   from:   http://mashable.com/2010/01/11/twitter-­‐growth-­‐stats/  (accessed  Monday,  25.  October  2010).  

 - Twitter  Closing  New  Venture  Round  At  $1  Billion  Valuation  (Webpage)  

Available   from:   http://techcrunch.com/2009/09/16/twitter-­‐closing-­‐new-­‐venture-­‐round-­‐with-­‐1-­‐billion-­‐valuation/  (accessed  Monday,  25.  October  2010).    

- Twitter's  Financial  Forecast  Shows  First  Revenue  In  Q3,  1  billion  users  in  2013  (Webpage)  Available   from:   http://techcrunch.com/2009/07/15/twitters-­‐financial-­‐forecast-­‐shows-­‐first-­‐revenue-­‐in-­‐q3-­‐1-­‐billion-­‐users-­‐in-­‐2013/  (accessed  Monday,  25.  October  2010).    

- Twitter  Funding  Round  Is  Said  to  Value  Company  at  $1  Billion  (Webpage)  Available   from:  http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aPAHFu.jBrhM  (accessed  Monday,  25.  October  2010).  

- U.S.  teens  are  lukewarm  on  Twitter,  love  Facebook  (Webpage)  Available   from:   http://www.marketwatch.com/story/teens-­‐arent-­‐into-­‐twitter-­‐but-­‐they-­‐love-­‐facebook-­‐2010-­‐02-­‐09?reflink=MW_news_stmp  (accessed  Monday,  25.  October  2010).    

- Web  Users  in  Iran  Reach  Overseas  for  Proxies  (Webpage)  Available   from:   http://blogs.wsj.com/digits/2009/06/15/web-­‐users-­‐in-­‐iran-­‐reach-­‐overseas-­‐for-­‐proxies/  (accessed  Monday,  25.  October  2010).