WTF Chart of the Day: Twitter IPO

By Lawrence

histogram with Gaussian distribution on blackboardTwitter is not even listed yet so where do I get a chart on the stock?

No, I am not talking about the funny activities on the stock Tweeter Home being mistaken as Twitter.

I am talking about the number of Twitter members and some basic math on these figures.

Some figures of interest (data from http://twittercounter.com/):

1. Number of Twitter users,

  • Total users at 554.7 million
  • Active every month at 218.3 million

2. Top 5 users with most followings are,

  • Justin Bieber has 45.4 million
  • Katy Perry with 44.3 million
  • Lady Gaga with 40.2 million
  • Barack Obama with 37.7 million
  • Taylor Swift with 35.0 million

3. Some non-celebrity user stats,

  • CNN has 10 million
  • Reuters has 3.4 million
  • BreakingNews has 6.2 million

Some people question why Twitter has to throw so much money on R&D.

By digging into the numbers just a little I think the answer to the question is very obvious.

Given the fans of the celebrities do not fully overlap since we know Justin Bieber’s fans are mainly female while fans of Taylor Swift and Katy Perry are not, it is easy to estimate that at least 200 million active users of Twitter are just fans of the top 10 to 15 celebrities (excluding Mr. Obama) on Twitter. These fans account would not be interested in anything outside of messages tweeted to them by their idols.

Advertisements are completely useless to these users as the core function of their Twitter accounts are their links to their idols, not a screen to pay attention to.

Given the reported active users by Twitter at 218.3 million, subtracting the 200 million celebrity fans, Twitter has at most 18 to 20 million active business users. This figure is confirmed by the low number of followers on the major business Twitter accounts listed above.

Twitter as a tool to receive and broadcast short messages can never become Facebook as a social hub with interactive content which has the advantage of more advertising screen space and easier forced interaction. Hence Twitter cannot really make more money through expansion in the consumer / social network route as advertising in the current form will not be effective on the Twitter platform.

Of course Twitter can start charging the celebrities money when they tweet as a broadcasting service, it will change the game but also open the door to steep competition offering the service at a lower price point.

As a whole, Twitter has to find a way to make itself useful to the business community like what Facebook finally did to increase its profitability. Twitter has to dig really deep this time or its aura will fade under the microscope of the stock market participants.

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