The Smart Money’s on Networking: Twitter strikes gold (again)

Posted by sarah, September-30-2009

Twitter hit the headlines again last week by confirming that they have secured a significant cash investment, rumoured to be around $100 million, from a new venture capital deal. This is despite the fact that it has to date made no profit. What’s more, it seems to be a long way off doing so, with no apparent mass revenue generation inherent in the site as it stands.

A takeover is therefore looking less and less likely as co-founders Evan Williams and Biz Stone remain stalwart and confident that Twitter can compete with its bigger rivals. Twitter has already rejected takeover bids from both Facebook and Yahoo, which illustrates the site’s commitment to being a major player in the social networking market. Twitter is surely also leading the race in terms of column inches, as the public continue to be charmed by this completely new form of communication.

It is testament to Twitter’s popularity amongst it’s hardcore that it is expected to perform so well. It could be viewed as a slightly risky proposition. A significant number of Twitter users must simply be dead accounts which have been opened and never used. Twitter is defensive about statistics so this is difficult to verify, but I suspect that if we could delve into this information we would see that that Twitter is less addictive than its older cousin. Inactive accounts will also be a factor with Facebook, but that site definitely seems to have a deeper purpose and more ubiquitous appeal; it is harder to imagine the world without Facebook now considering its almost complete entrenchment into our daily lives in both the personal and business spheres.

What today’s news does however support is that quickfire communication over the internet is becoming big business, mainly because Facebook, Twitter, MySpace, LinkedIn and their counterparts are such effective tools for their respective demographics. Twitter’s microblogging approach has clearly captured the zeitgeist in a hugely effective way, and it is good to see serious business people taking such methodologies seriously.

It seems that the smart money continues to be on social networking online, and this seems unlikely to change any time soon. It will be interesting for us all to see what developments come next.