Twitter as a Real Business Opportunity - Case Study Example

Entrepreneurs at Twitter - Case analysis Name: Course: Date: Table of Contents Twitter as a Real Business Opportunity …………………………………………………………. 4 Twitter’s situation in 2010 ………………………………………………………………………. 4 Twitter’s marketing approach …………………………………………………………………… 6 Recommendations to improve marketing ……………………………………………………….. 7 Strategies for Twitter to earn Profits ………………………………………………………..…… 9 Conclusion …………………………………………………………………………………...… 11 References ……………………………………………………………………………………… 12 Executive Summary Twitter is categorized in the class of a micro blogging service which makes it possible for subscribers to receive and send “tweets” of at least 140 characters to their “followers.” Lately, the service has featured in the news as the latest hot technology companies after Facebook and Google (Claire 2010). The service has also been cited as particularly influential in socio-political events for instance U.S. presidential elections with Senator Barrack Obama’s noted as having thrived well with his campaign through twitter and other example of political protests in Iran being facilitated adequately through this service (Cooper-Taylor 2008). In the entrepreneurial world, the service comes alive and has been in use since its development. This paper makes a case study analysis on Twitter as used by entrepreneurs in the business world. In discusses, Twitter as a real Business Opportunity, outlines Twitter’s situation in 2010, Twitter’s marketing approach and makes Recommendations to improve marketing for twitter while proposing some Strategies that Twitter can implement to earn Profits. Twitter as a Real Business Opportunity Twitter can be described as a real business opportunity for any entrepreneur across the globe. For one, Twitter is a rich source of information and the most valuable is the instantly updated information indispensable for anyone in the business world. With Twitter, it becomes easy to stay updated particularly on a range of topics in the business world (Krishnamurthy, Gill & Arlitt 2008, p. 3 – 7). With such an opportunity, twitter becomes an easy way through which investors can start up investments with an informed choice that would deliver positive results in business (Java, Song, Finin & Tseng 2007, p. 7 - 10). On the same note, the way twitter works adds to its incredible value of a business opportunity. Twitter is all about followers, and this is the key word to success in business. Through twitter individuals aspiring to venture into the business world just need to establish them and gain followers (Huber man, Romero & Wu 2008, p. 28 – 54). In its system of operation twitter works as a site where pieces of information are sent to your followers that you target through your Twitter account (Honeycutt & Herring 2009, p. 76 – 83). Any message you post through Twitter is copied to followers, and this makes it better because entrepreneurs can cease this opportunity to start up and develop ideas in business (Krishnamurthy, Gill & Arlitt 2008, p. 3 – 7). The logic behind Twitter is that the more followers an individual or company has, the more people you will manage to send messages to and in turn the more powerful one is able to promote a certain idea or product in the business world. Twitter’s situation in 2010 Twitter’s situation in 2010 reflects the past record of its founders (Claire 2010). At the initial stages of its foundation, twitter was of the view of developing a business model. While continuing with the huge efforts of building a large user base held as critical, equally enthralling & Herring 2009, p. 76 – 83). This is similar to the case in point in year 2010 where the company is facing a dilemma on its survival (Cooper-Taylor 2008). The concept of investment and profit making has hit the road and faced immense challenges with twitter not sure on what best ways it can adopt to strategize on profit making. Suggestive of the dot-com startups that took place in the 1990s, Twitter by then raised over $155 million from investors in several funding plan implementations (Spencer 2009). This followed the trust of many investors who believed in twitter as one of the best and promising services across the globe. However, the company did not make any profits by the apart from adding to its value, which stood at US$1 billion from the huge funding (Huber man, Romero & Wu 2008, p. 28 – 54). Same case has been experienced in year 2009 where twitter is facing a challenging situation of making profits (Spencer 2009). What is happening in year 2010 is that many investors have had confidence in a twitter as a promising service in the entrepreneurial world. By March 2010, reports from Twitter indicated that they had recorded over 70,000 applications, which were registered (Tracy 2010, p. 85-93). Earlier in February 2010 users of Twitter were reported to have sent over 50 million tweets every day on average which was showing a prospective growth of the service. This situation can be well linked with the situation in history when twitter was discovered and started operating. Its database by then was known to have grown and hit a 900 percent increase within one year (Krishnamurthy, Gill & Arlitt 2008, p. 3 – 7). In year 2010, over 4 billion tweets were said to have been posted and about 65 million tweets, in the next month prospected as being posted each day (Claire 2010). In year 2010, Twitter's usage goes up especially during prominent events. It is from the history of twitter that it has been known to enjoy the increase of users during particular events and occasions (Tracy 2010, p. 85-93). Same case had been experienced in year 2010 when the 2010 world cup was being hosted in South Africa. Twitter hit a record in the event of 2010 FIFA World Cup. During this time, fans wrote over 2,940 tweets per second as recorded by twitter. This was in the 30 second period soon after Japan hit a score against Cameroon hosted on 14 June 2010 (Claire 2010). This was a record broken again in twitter when 3,085 tweets a second were reported to have been posted soon after the victory by Los Angeles Lakers' in the 2010 NBA Finals hosted later on 17 June 2010. It has, therefore, been a year of twitter increasing its database but on the same note facing a challenge of making profits in developing a biasness model (Claire 2010). Twitter’s marketing approach Twitter marketing approach has been through the media and has taken the Slogan ‘follow me on twitter (Huber man, Romero & Wu 2008, p. 28 – 54).’ Since year 2006, Twitter has had been explosive and has had an enormous impact on media, popular culture and marketing. Follow us on Twitter in the past few years has suddenly spread everywhere (Honeycutt & Herring 2009, p. 76 – 83). The approach has involved advertising through television broadcasts and through print media. Other Twitter’s marketing approaches to date have been dealing with collaborations with other websites (Claire 2010). For instance, TweetAdder is one of the partners that twitter has to help in devising its marketing strategy. This is a piece of software developed in helping automate getting followers to an individual Twitter account (Java, Song, Finin & Tseng 2007, p. 7 - 10). The software was devised in that it would help in increasing an individual’s follower count in a short period through automation of messages to targeted followers. It has been a compelling marketing strategy because it has received a good reception across the Globe and has increase awareness to individuals about twitter, therefore, increasing the registered number of people. Recommendations to improve marketing Twitter’s marketing approach should have an advanced strategy and a different look in the future (Krishnamurthy, Gill & Arlitt 2008, p. 3 – 7). Even with the established follow me on twitter strategy; it is still unclear particularly for the everyday consumer on whether they can find the real Twitter experience (Huber man, Romero & Wu 2008, p. 28 – 54). On the same note, it is a strategy that requires polishing up basing on the fact that there is high competition in the social networking filed where other sites including Facebook are coming alive with far more self explaining and definitive advantages of using their sites (Java, Song, Finin & Tseng 2007, p. 7 - 10). Therefore, Twitter needs a diversified approach in marketing if it has to win over the competitive advantage over its competitors (Claire 2010). It is extremely possible for Twitter to earn profits. However, this is something that would take a long duration subject to the marketing strategies of the company and how successful they are in establishing new followers. At this point twitter as a company has only been operating without a business model which would be used appropriately in generating revenue for them. Therefore, it has become extremely difficult for twitter to make profits (Huber man, Romero & Wu 2008, p. 28 – 54). However, this is not reason enough to justify that twitter cannot make profits, with a better look into the concept, twitter can make ample profits. With the company increasing the number of members, Twitter is continuing to increase its value (Java, Song, Finin & Tseng 2007, p. 7 - 10). At present, there are assertions that Twitter’s value is close to $1 billion (Honeycutt & Herring 2009, p. 76 – 83). This means that within the fiscal year of the company operation it would be able to start offering services paid for, in due time. It is a strategy that would make it profitable but in the real sense requires better planning. The online industry Standard has reported that Twitter's long-term viability holds as limited by a lack of adequate revenue (Lew 2007). This has been prospected as the main reason why many people view twitter as not being able to make profits (Krishnamurthy, Gill & Arlitt 2008, p. 3 – 7). Todd Chaffee, a board member at twitter forecast that the company would better look into issues of making profits a little deeper. He asserted that profit making would best be generated from e-commerce, with a close point of argument that users of twitter may develop an interest of buying items directly from the site since they already enjoyed the provided product promotions and recommendations. The argument was that twitter would make profits from the same promoted and recommended products by selling them directly from the site. Early this year, on April 13, Twitter made the announcement on their plans to capitalize on paid advertising for all organizations, which had the capability of purchasing "promoted tweets (Huber man, Romero & Wu 2008, p. 28 – 54)." This was a reasonable strategy if followed closely, as it was an excellent idea in the process of profit making. The adverts for the respective companies were planned to appear in selective results on Twitter, which was something similar to Google Ad words which were highly profitable. It was an idea referred to as an advertising model (Java, Song, Finin & Tseng 2007, p. 7 - 10). As of early April 13, 2010, Twitter in its reports announced that their strategy was bearing fruits as it had signed up several companies which had an interest in advertising through twitter. In the list of interested companies included Red Bull, Sony Pictures, Starbucks and Best Buy (Tracy 2010, p. 85-93). It is a legitimate point of argument to justify that Twitter can make enormous profits only if the management gets serious and establishes such strategies of marketing. Strategies for Twitter to earn Profits To capitalize on its popularity Twitter needs to develop strategies and add to its better approaches of making a profit. As discussed earlier, Twitter’s Value relies on the Huge Database, which it generates as a daily routine (Krishnamurthy, Gill & Arlitt 2008, p. 3 – 7). Therefore, if there are any profits to be generated, the whole thing will be depending on strategies to increase database and in turn increase its value which adds to its profits (Java, Song, Finin & Tseng 2007, p. 7 - 10). On a business perspective, profit making has diversified ways and not only in selling a particular product to customers at a profit. The size of twitter’s database is compelling enough for the company to implement better strategies in profit making (Huber man, Romero & Wu 2008, p. 28 – 54). SMS marketing companies, which have been making immense profits, pay millions to build a database which twitter already has and it’s strongly established (Lew 2007). To capitalize on this means that the company needs to approach the situation in a good way. It also requires trying to keep the database while establishing other ways of increasing the database. In putting the plans fore mentioned above into action Twitter needs to make changes and reform with inputs of better approaches to profit making (Honeycutt & Herring 2009, p. 76 – 83). The company needs to look into how it can start providing services to customers who pay and in this, they can make ample profits. For instance, with an already established data base, the company can start with collecting demographic data. This is particularly in relations to the members who have joined the site with interests in Age, gender, and location (Krishnamurthy, Gill & Arlitt 2008, p. 3 – 7). The categorization can also look into interests of the said groups. With this in place, twitter can start profiling the categorized database, including looking for what individuals are interested in and what the same people do (Honeycutt & Herring 2009, p. 76 – 83). The survey can be done with a closer look into a particular company of interest that twitter can sell the idea to and earn (Huber man, Romero & Wu 2008, p. 28 – 54). It is time for twitter to look for companies with intent of marketing to these people, their products by targeting their demographics and twitter can soon make a business plan charge these people and make the best out of it in terms of profit making (Krishnamurthy, Gill & Arlitt 2008, p. 3 – 7). Many companies have profiled several potential business models in partnership with Twitter before they make their investment and this opportunity has just been going down unnoticed in twitter (Java, Song, Finin & Tseng 2007, p. 7 - 10). As from the words of many investors, twitter has outdone other gargantuan companies in online display advertising and this would be a fantastic chance for twitter to exploit in making profits (Honeycutt and Herring 2009, p. 76 – 83). However, the big challenge in tapping the companies using twitter and making proposals of business partnerships is the ability to establish or verify whether or not some brands being promoted are real (Huber man, Romero & Wu 2008, p. 28 – 54). This, therefore, has remained as one significant challenge, for twitter to start charging for such ads and promotion strategies making it a free website for everyone (Honeycutt & Herring 2009, p. 76 – 83). From the words of a director in marketing “More and more brands have recently turned to twitter in efforts of promoting goods and providing feedback on particular products, but the issue remains that it has become extremely difficult to establish who is legit (Java, Song, Finin & Tseng 2007, p. 7 - 10).” Therefore, this has overburden twitter in establishing who the best people to collaborate with in business are, and it still holds as a dilemma that twitter has to face making it difficult to strategize on profit making (Cooper-Taylor 2008). Conclusion Twitter is in the category of a micro blogging services that have made it possible for subscribers to receive and send “tweets” of at least 140 characters to their “followers.” Twitter service has of late featured in the news as the latest hot technology companies after Facebook and Google. The service has also been cited as particularly influential in socio-political events for instance U.S. presidential elections. In the entrepreneurial world, the service comes alive and has been in use since its development. This paper discussion has made a case study analysis on Twitter as used by entrepreneurs in the business world, and the revelation is that it can be profitable if only the board makes better approaches and strategies for business planning. E-commence has bee the main discussion with a clear revelation that with appropriate strategy on the same, twitter would earn immense profits. 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