Twitter IPO: Will This Be the Sequel to the Facebook (FB) Stock Flop?

recent report by Greencrest Capital projects a 2014 IPO for Twitter, with this year spent on monetization and preparation. Generally speaking, going public means increasing pressure to meet or beat profit expectations and a reduction of development control. While the investment world speculates about Twitter's valuation and IPO performance, some social media consumers are already complaining about a deteriorating social media experience caused by the pursuit of profits. In the case of a post-IPO Twitter, users should expect an increase in the volume and nature of promoted content, new features to encourage more time spent per user, and the introduction of e-commerce.

Consumers can look to Twitter's current development path and Facebook's post-IPO path for clues as to how their experience may change. In 2012, Twitter made it easier and more rewarding for companies to promote content. Purchased promotion of tweets, trends, and accounts has already proven successful. Promoted tweets and trends have shown to have a "double-digit" user engagement rate compared less than 1% from traditional banner ads on the web. Companies have had success publicizing events and dramatically increasing followers to build their brand. Twitter CEO Dick Costelo has said these advertising tools are "the scalable model that will do everything we need to do for the business." As a user, you can expect a post-IPO Twitter to expand the promotion moneymaker as much as your engagement allows.

The nature of promoted content will undoubtedly be adapted in pursuit of this engagement. One way this will happen is personalization. Twitter currently trails its rival, Facebook, in user knowledge. For example, most Facebook profiles contain age, sex, interests, etc. while Twitter profiles are noticeably sparser. Twitter already rolled out personalization of profiles and users should expect the company to seek out more personal info in the future. Another content change is related to timing. As Twitter has been designed from the ground-up as a "real-time" social network, it's reasonable to assume the company will seek to match promoted content with a user's real-time needs. Cellular connections will provide the necessary locating technology to enable tailoring promoted tweets to your immediate surroundings. 

The phenomenal rise of Instagram in 2012 was additional proof of the old adage that a "picture is worth a thousand words." In this case, user statistics showed that Instagram's pictures led to 51% more time spent per user than Twitter's 170 characters. Twitter recently added picture filters to its mobile apps in an attempt to grab this time and attention. In addition, Twitter cards, have been added to attach multimedia content to tweets. Users can expect this content enrichment to continue not only to increase the time you waste spend on Twitter but also to increase engagement with promoted tweets.

Facebook's IPO last year brought with it overinflated expectations, poor stock performance, and a backlash by market experts. Accompanying this rough ride was the launch of an almost dizzying array of monetization features. One in particular was Facebook Gifts, a feature that allows friends to purchase and send gifts directly through the site. Twitter CEO Costelo has spoken of e-commerce prospects saying, "it's particularly interesting in areas where you've got things like perishable inventory." Users should expect that the post-IPO (and more monetarily driven) version of Twitter will allow them to tweet-purchase almost stale lettuce from their local grocers, food truck remnants, and the last remaining concert tickets just minutes before their favorite band takes the stage.

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Travis Higgins

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