One of the amazing things about social network companies is their ability to generate value for their businesses without turning a profit. Businesses such as Facebook, MySpace, Groupon and Twitter have been valued at many billions despite the fact they have not proved their business model actually works and can make money for investors. MySpace and others like it have shown that generating global popularity and a sky high valuation can be a fleeting thing and is no guarantee of lasting success, but still, new social networking sites have followed and created a frenzy of excitement among potential investors.
Twitter has recently suffered the effects of reporting lower than expected user growth. Its share price tumbled 20% amid news its honeymoon was over, but does this mean itâ€™s on the way out? Not necessarily. But maybe it will be the end of ridiculously optimistic valuations (in the case of Twitter, sixty times its revenue).
What Twitter and Facebook etc have shown in the past few years is that it can be extraordinarily difficult to successfully monetize a user base on a social network without ruining the experience for them and scaring them off. Facebook has perhaps started to achieve it in the past 12 months, but think about all the investment they have had, the best minds in the industry working towards this goal, and they have struggled. Unfortunately for Twitter, they are still struggling to monetize their product, and the slowing down of their growth on top of this is making the market jittery. Despite its enormous popularity Twitter accounts for only 0.5% of global online ad revenues, and without turning this around, its share price is only going to go one way.
However, this doesnâ€™t change the fact that Twitter represents one of the best mediums for marketing small businesses online. Despite its stock market troubles, it remains highly credible and highly effective, particularly because of its inbuilt limitations. The character limit in many ways forces marketers to stick to the point and remain concise, when perhaps their natural impulse would be to waffle and go into too much detail.
Rosco Digital Media believes Twitter will continue to be the best micro-blogging platform out there for small businesses for the foreseeable future. There are a number of alternatives out there like Tumblr or Pinterest, but none that can match Twitterâ€™s reach or immediacy.
The team at Rosco lives and breathes the online world, so contact us today to create your new company website and ensure youâ€™ve got the best social media strategy for your business.