IMB Enterprises, Inc., Huntington, NY 11746 +1 (631) 673-2929, imblonder@imbenterprises.com

What Does Twitter Sell and Who Buys Their Products?

IraMichaelBlonder
IraMichaelBlonder
November 13, 2013

On Thursday, November 7, 2013, Twitter became a publicly traded business. The opening price for the TWTR stock, set on November 6, 2013, the day before the IPO, was $26.00 per share. TWTR closed the first day of trading at $44.90, 73% above the opening price. Based on the float, meaning the number of share issued on Twitter’s first trading day, the book value of the business is approx $25 Billion.

The Barrons November 11, 2013 edition includes an article written by Alexander Eule, “How Twitter Might Actually be Worth $31 Billion”. Eule states “We now know what the broad market is willing to pay for a company with an unpaid workforce of 230 million people that creates (sometimes) compelling content for a global audience”.

But do we know anymore about what they sell, and what their target market looks like? From Eule’s article, it’s safe to conclude “no, we don’t”. So how do we get to some useful understanding about the product marketing strategy for this business?

Eule’s 230 million people, in my opinion, are consumers of Twitter’s product, and not an “unpaid workforce” for the company. They buy the Twitter product, which for 99+% of them is absolutely free of charge. These 230 million “Twitterers” can build a page, at no charge, on the Twitter website. As long as they respect Twitter’s publishing guidelines, they can publish as frequently as they want to their page, “retweet”, reply to “tweets”, etc. Twitter’s product is a spot on one of the most highly trafficked websites on the Internet. The product marketing opportunity on Twitter’s horizon, in my opinion, is to scale the types of space offered to these 230 million (and, hopefully, growing) people, and to build a method of monetizing their consumption of the product.

The public Eule assumes, meaning all the folks reading the content published by Twitter’s unpaid 230 million employees, do not exist. In fact, the general public can’t review anything on Twitter. Reading content on Twitter requires a Twitter account. So if one tries to extrapolate a Google-like click ad experience for the public on Twitter (which Eule’s article suggests to be the case), one is not likely to succeed. The real comparison is with facebook, which has a very similar accessibility requirement.

In the next post to this blog I’ll dig a bit deeper into Alexander Eule’s article.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved

  • Ira Michael Blonder calls on over thirty five years of experience marketing, promoting & selling tangible and intangible products and services within his consulting practice. He has first hand experience with several very early stage businesses targeted to Fortune 100 customers. The common thread between these early stage efforts is that product and/or service offerings incorporated computer technology. He is an excellent choice for a CEO in need of a trusted advisor as products, promotion and sales are planned.

Product Marketing

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