The Cautious Twitter

As a social media enthusiast, I am constantly on Twitter, Facebook, LinkedIn...you name it. I constantly follow the trends of social media thanks to a website called Mashable. And I constantly look for opportunities to improve my social media skills because I know how big it is for marketing right now.

But until today, I never really thought about exactly what goes on behind the scenes at one of the social media powerhouses. In an article called, "Twitter, the Startup that Wouldn’t Die" by Brad Stone of BusinessWeek, the business behind Twitter is more complex than you’d think.

Right now, Twitter is going through a change in their business model. Why? Because they’re trying to prove that they’re not just a fad. They’re trying to prove that they are not like MySpace and plan to make this website a long-term endeavor. And they’re doing this by changing two major things: implementation of corporate advertising and the constant improvement of the technology behind the company.

CORPORATE ADVERTISING

Up till early 2009, Twitter defined their business model for advertisement more of, as the article puts it, "what it did not want to do than what it did." After rejecting companies like Microsoft wanting to place advertisements on the sides and not willing to sell corporations data, it was clear that Twitter stood opposed to making its company an online advertisement hub. Essentially, advertisement was banned from Twitter except for the minimal licensing deals that Twitter made with select companies. They wanted to make the website as user friendly and user oriented as possible.

But after Dick Costolo, the Chief Operations Officer of Twitter in 2009 (now CEO), finally grasped that everyone on Twitter is essentially a marketer who was trying to promote something in every tweet (whether a link, a message, a picture, etc), he realized that maybe it was time to make some money off of this.

And now on Twitter, you see those "Promoted Tweets," where companies pay a bit of extra money to get their hashtag (#) to be first on the Top Trending list. This changes their business model: they now want to provide clean, user-friendly, non-disruptive advertisements that still gets the message across by becoming content on the website like everything else is. Twitter is coming up with multiple ways for companies to get the most bang out of their buck with Twitter advertising including the "promoted tweets" (as mentioned above) as well as unique opportunities like having Microsoft’s Bing be the search engine of choice when looking up hashtags on Twitter. Advertisers complain that they don’t get as much out of advertising on Twitter as they do on Facebook because Twitter does not make information like age or education information mandatory available like Facebook does. Targeting certain people is a lot harder on Twitter than Facebook. But Costolo defends Twitter by commenting that who a user follows paints a bigger picture of who that user is than any age/education/etc demographic could ever give them. It shows personality and Costolo believes that "that allows [Twitter] to deliver powerful value to advertisers."

IMPROVED TECHNOLOGY

But it’s not only the making money part of the business model that is changing. The increased efficiency and fluidity of the website is continuing to improve every day. Remember the infamous "Fail Whale" that came on every time that Twitter crashed? I do...because Twitter used to crash a lot. But if you’re a Twitter user, stop and think for a bit: how many Fail Whales have you experienced lately?

I really can’t think of any. And with the high volume of tweets during events like the Super Bowl, Twitter has not failed us during those times. This is due to the rapid growth of the company that has been implemented. From 45 to 900 workers in the last five years, Twitter finally has the manpower to keep this up. They are now finding better ways to rid of spammers, which will stop scaring away both users and advertisers.

SO WILL IT LAST?

Here’s my take on it: Twitter will last for many years to come. Although many companies are overzealous, overconfident and become rather egotistical as their business continues to boom, Twitter has still stayed cautious and even a bit too hesitant in my opinion. The thing about Dick Costolo is that the exciting business of Twitter hasn’t gotten to his head to make irrational and audacious decisions. He has no plans to make the company public anytime soon, stating that he has the patience when it comes to pursuing more revenue. Core values are stated clearly and he actually administrates leadership courses to senior executives four times a year.

As always, Twitter has to be careful with this success and not get carried away with it. The social media industry feeds on fads and so Twitter must "proceed with caution," when trying to expand even more. I personally think they’ll do well to avoid getting too boastful because, once again, Dick Costolo isn’t too concerned about making the highest possible revenue. This shows that Twitter understands its growth but does not try and get ahead of themselves.

“We’re trying to build a lasting company, a company that will change the world in interesting and beneficial ways... I think it’s consistent with the way we are building the company, as a lasting part of the media world.” — Dick Costolo, CEO of Twitter

What do you all think? Is Twitter just a fad? Or are there movements with advertisements and technological improvements going to make Twitter a long-term company?