A couple of days ago Twitter released its shares on the NYSE. Initially their prices rocketed to way above what had been expected, with shares climbing to a pinnacle of $50.09 during the first day of trading. From the rapid increase in value on the first day of the stock market (79% of IPO), shares dropped by 7.24% during the second to a value of $41.69. It will be interesting to see what happens today and throughout the rest of the week as to whether prices continue to decrease.
Since the creation of Twitter in 2006, the micro-blogging platform has yet to make profit. Twitter posted they had made a loss of $134 million in the first 9 months of this year, in comparison to Facebook which had profits of over $1 billion before taking to the NASDAQ stock market.
Twitters future isn't looking as bright as some may expect. The strict constraint of the 140 character limit and the fact it is used as a means of promotion, whether that be through self-advertisement or unattractive promotional links has put users off, like myself. For exhibitionists it is a perfect way to reflect their lives and address the public but realistically, it is nothing more than a marketing platform. Facebook still prioritizes over links with close friends and the increasing number of mobile phone apps, such as WhatsApp and the newly introduced BBM messenger (now available on the App Store?) has given Twitter the backseat.
The total monthly active users on Twitter sums to 20% of Facebook's. The company also claim that more than 75% of their activity is users accessing their accounts through mobile phones. Despite the popularity, Facebook still receives over four times the amount through mobile use compared to Twitter. The most followed celebrity, Katy Perry is also no match for the 80 million likes Rihanna has received on Facebook.
Considering all this, it will be hard for Twitter to begin making money. I suspect, if they are to start making a profit it won't be for another few years. Its best chance to help boost growth is by using the $2 billion available to them and make some strategic acquisitions, preferably through companies that already know how to make money.
The total monthly active users on Twitter sums to 20% of Facebook's. The company also claim that more than 75% of their activity is users accessing their accounts through mobile phones. Despite the popularity, Facebook still receives over four times the amount through mobile use compared to Twitter. The most followed celebrity, Katy Perry is also no match for the 80 million likes Rihanna has received on Facebook.
Considering all this, it will be hard for Twitter to begin making money. I suspect, if they are to start making a profit it won't be for another few years. Its best chance to help boost growth is by using the $2 billion available to them and make some strategic acquisitions, preferably through companies that already know how to make money.
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