Some of us may have no interest in Twitter and see it as a social networking site that will fade over time. The rest of us are avid Twitter users who use the social networking site in many ways including to inform, follow and communicate. There are individuals who are more than just Twitter addicts. Big investors are supplying millions of dollars to the social networking site.
Dave Murrow of Think Fast! shares the hot topic in his blog post: “The Billion Dollar Communications Tool Called Twitter.” Reports released on Sept. 24 revealed that Twitter was close to securing $100 million in funding that valued the company at $1 billion. Skepticism comes in because a billion dollars is being invested into a company with virtually no revenue. Is Twitter really worth a billion dollars?
I see Twitter as a strong tool for communicating. I think it’s a new innovative way to do business by representing brands and people. As public relations students, we know the media heavily uses the social media platform to promote their content. After we graduate and enter the PR field, we are expected to have social media knowledge and practices. Although, I am a supporter for social media, it surprises me that millions of dollars are being invested into Twitter during the economy’s recession and speed of technology.
The New York Times made a comparison, reasoning that only 60 employees maintain Twitter’s business, but the social media platform has doubled the market capitalization of Domino’s Pizza, which has 10,500 employees and brought revenues of $1.4 billion in sales last year. Twitter also has more than 54 million monthly visitors which is only one-tenth the population of Facebook.
What is Twitter going to use with $100 million in new investments? According to a BusinessWeek article, Twitter co-founder Biz Stone said advertising plans are on hold until 2010. Spectators claim acquisitions are going into search and marketing intelligence that companies can utilize to learn more about clients and potential markets.
From a PR prespective, Twitter has it strengths, weaknesses, opportunities and threats. Business moguls see the microblogging service as an opportunity for business, a channel to connect with targeted audiences internationally and a mainstream spot for marketing and news organizations. Non-profit organizations may see an opportunity in strengthening internal communications while college students may only view Twitter as another manner to connect with friends and classmates. A threat for Twitter is that it may fall into its grave as another fad in a few years.
I’ve learned from my internship with a PR agency how powerful it is to create a Twitter account for companies/clients, products/services and individuals. Twitter becomes a stronger tool for communication as more journalists, bloggers and media outlets are on the social networking site.
The tremendous amount of money now involved and high stakes returns back to my first question: do you believe Twitter is a billion dollar empire? Do you think the investments will lead to a success or a failure? Would you invest into Twitter or do you believe it’s non-profitable? How do the investments affect you as a PR student and future PR professionals?