Written by ContentPowered.com
Much has been made of the recent news that Twitter will soon be a publicly traded company. The company, now over seven years old, has grown at an impressive rate and is ready for the stock market.
While Twitter is popular, it is still a bit of an unknown for a number of reasons. It is set for a $1 billion IPO, but has never turned a profit. It has grown its advertising revenue significantly in the last year, and nearly every large business has a presence on the site in one form or another.
With all of the questions, one of the most important is whether the site can and will become more popular after hitting the stock market. The answer to this is almost certainly yes. Here are some of the factors that will likely come into play and determine just how popular Twitter will be after their IPO.
Profitability And Advertiser Confidence
Already addressed above, Twitter has lost money each year it has existed. In the first half of 2013, Twitter has posted a loss of over $69 million. While not a large loss by Wall Street standards, and certainly not large by most standards in the technology based start-up world, it is still a loss.
In order for the company to gain popularity where it really counts, with advertisers, they will need to show that they are capable of existing on their own. Advertisers have more power in driving a site’s popularity than most people would care to admit.
Namely, social media provides a unique opportunity for people to engage with one another online in ways that blogs and discussion forums do not. Should a business decide to run an online contest or other promotion, social media makes perfect sense.
These can drive new users to a site simply because people are looking for a deal or a chance to win something. Driving engagement around advertiser activity can then lead to new users becoming return and active users.
If advertisers believe that Twitter is a sustainable and worthwhile place to spend a portion of their budgets, they may play a significant role in the growth and popularity of the company.
Big News Drives Curiosity
The very news that Twitter is going public is going to result in a string of headlines leading up to the IPO. News outlets have become technology obsessed and cannot resist covering the story when popular companies go public. The best example being the Facebook IPO, which dominated headlines for months before and after the company went public.
Given the relatively disastrous Facebook IPO, it is safe to say that there will be a fair amount of sensationalizing in the media. Will Twitter’s stock price be set too high? Will the price fall in the first days like Facebook’s price did? How many users are on the site, and how do they interact with one another?
The interest the media shows in the company will almost certainly drum up interest among the public as well. People who are not currently on Twitter will almost certainly head to the site and sign up just to see why the media is making such a big deal about the IPO.
There Is Room For Improvement
According to Twitter, of the two-hundred million plus active users on the site, over seventy percent are outside of the United States. That leaves well over one hundred million potential new users in the United States.
Considering that social media is viral in nature, it stands to reason that as new users sign up out of curiosity, that they will spread the word to their friends and result in new signups as well. Whether that will make up for the deficit of US based users or not is still to be seen, but the odds are good that at least some growth in the amount of Twitter users in the US will occur through word-of-mouth.
Integration With Other Sites And Services
Instagram received a significant boost in users when Facebook acquired them for $1 billion. The infusion of cash, as well as the increased exposure the company received has led to impressive growth. They now boast over fifty million new users since the acquisition.
Facebook now shows Instagram feeds in user timelines. The integration between the two services has certainly boosted the popularity and user numbers of Instagram.
Twitter has incorporated their own video and photo sharing services, and will likely look to partner with other sites and services as well. What those are stands to be seen, but in today’s tech world, hardly any sites or services exist in a bubble.
There will be other companies that need or want to partner with Twitter or possibly be acquired. This will result in new users and more interest from people who have yet to sign up.
Wrap Up
In the end, it is not guaranteed that Twitter will grow in popularity after they hit the stock market. Most believed that Facebook would see their stock price soar, and it took over a year for the company to recover its stock price after its IPO went far worse than expected.
With that said, it is hard to see a situation where Twitter does not grow in popularity. The trends have all led to impressive growth after hitting the stock market. The knock-on effects of increased press and activity around the company nearly always lead to increased popularity and user growth.
paul
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