Does high-flying Twitter IPO signal death of the social network?

In this Searchlight: The Twitter IPO takes flight, CIOs should take notice; plus, a BlackBerry dilemma, a mobile shopping puzzle and more.

Karen GoulartKaren Goulart

It has helped start revolutions and couriered information in times of disaster. It has let you know what Jaden Smith thinks about trees. Love or loathe the hashtag-happy social network, the great success of the Twitter IPO signals the idea has staying power, whatever staying power means in these days of lightning change.  So if CIOs haven't already made it part of their work lives, now would be a good time to start.

There was plenty of handwringing before the bell ringing. Comparisons with Facebook -- whose IPO famously flopped -- were inevitable. But as noted in this week's lead Searchlight item from journalist Alistair Barr, unlike rule-breaker Facebook, Twitter showed up to class prepared.  Not only had it formulated a plan for the shift to mobile advertising, it played the IPO game on Wall Street's terms -- two things Facebook failed to do.  Despite having never made a profit, Twitter inspired confidence that it would.

The success of the IPO, of course, is more than just about getting the mechanics right. Piper Jaffray's latest semi-annual teen market study showed last month that Facebook is falling out of favor with teens, with only 23% of respondents calling it their "most important" social site, down from a high of 42%. Their new BFF?  Twitter, which got 26% of the love. Why do teens (and adults, celebrities, companies, revolutionaries) like it? It's easy and it's fast, and it's the wave of the future. Look at the other most popular social networks and it becomes clear they're not social networks in the traditional sense. Instagram, SnapChat, Kik.  Increasingly we're talking in pictures; Twitter is just enough words without being too much. Or as one teen put it in a May 2013 Pew Research Center study on teens and social media: "I got [my Facebook account] around sixth grade. And I was really obsessed with it for a while. Then towards eighth grade, I kind of just -- once you get into Twitter, if you make a Twitter and an Instagram, then you'll just kind of forget about Facebook."

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Teen speak aside, Twitter will be sticking around and is now afloat with public investors because other businesses have an interest in seeing it succeed. Twitter is nothing if not a massive processor of public sentiment. As Wall Street Journal reporter Elizabeth Dwoskin has noted, Twitter has a nice little side business "selling off its data to a fast-growing group of companies that analyze the data for insights into news events and trends." And while the IPO filing showed this wing of the business generated only $48 million in revenue, who knows how far data will take it. One social media monitoring firm CEO told Dwoskin: "Businesses have spent years understanding the past; Twitter has found a way to measure the present."

That's power and potential that shouldn't be ignored.

Let us know what you think about the story; email Karen Goulart, senior features writer.

This was first published in November 2013

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