Is Twitter the Second “Dot Com Bubble” ?
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Posted by James Kilgour | Posted in Technology | Posted on 23-07-2010
Tags: Dot-Com Bubble, JK, Online, Social Networking, Twtter, Web
Twitter, the fledgling social networking service founded in 2006 has grown in popularity. Now the regular online hang out of A-List celebs, multinational companies, journalists, politicians, and described as “the sms of the internet”. Users such as Ashton Kutcher have over 5.3 million followers at time of writing. In total, the service currently has around 190 million users, and has received large investments from private equity firms. The firm is currently valued at over $1 billion.
However, while it certainly has the audience, does it actually have the ability to generate revenue? The service carries no adverts, and charges users nothing for the service. Some third-party companies have tried to monetise the service; companies such as Izea who run sponsoredtweets.com. This company pays users to post tweets about other companies. But is a community of advertising posts what users want? Also, while this may earn Izea a profit, it doesn’t help Twitter.
It seems to me that perhaps Twitter will reach a ceiling, where it has too many users, and too higher overheads to keep running a worthwhile operation. And perhaps it’s financial backers will see this also. Either way, Twitter needs to start focusing on making themselves a viable, profitable company, and less of Freeinternet.com.
Follow me on Twitter, jmkuk.
JK

