By the end of the week, there's a good chance Twitter will be a publicly traded company on the New York Stock Exchange (NYSE). Twitter's bigwigs are targeting Thursday, and barring any surprises, it will go down as the biggest tech IPO since Facebook, making several people very wealthy over night. However, it's what happens to Twitter after going public that's of interest here.
Twitter recently overtook Facebook
as the most popular social network among teens in terms of which one has a bigger influence on buying habits and trends. That's not to say Facebook is losing users -- it's not -- but teens are definitely adding alternative services to their growing social portfolios, starting with Twitter, a place where unlike Facebook their parents haven't fully adopted
The reason this matters is because teens are a highly desirable demographic for advertisers. There's a piece in The Wall Street Journal
that talks about Twitter's huge potential for word-of-mouth advertising. Mix the two together -- teens and word-of-mouth advertising -- and you might have a recipe for big time success.
Twitter will change in the coming months as the suits in charge figure out how best to monetize the service's 230 million users. That number seems small compared to Facebook's more than 1.1 billion users, but Twitter's advantage is that a lot of its tweets are topical and happening in real-time. You have sports stars sending out tweets from locker rooms and pop singers sending out 140-character messages immediately following a performance, not to mention all the tweets from fans during the actual show. Advertisers can tap into this unique characteristic of Twitter and target users based on what's trending at any given moment. Maybe as you're tweeting about the Red Sox having just won the World Series, an apparel company posts an ad for celebratory gear. It's just one example of many.
The bottom line is that Twitter has a lot of potential to rake in some big money, and it will be up advertisers to find out what works and what doesn't, especially among chatty teens.