Tannouri+Strategy+Report

TO: Proximity social networking team FROM: Andy Tannouri DATE: January 7, 2010 SUBJECT: Twitter strategy analysis


 * Profile**

Twitter is a free micro-blogging service created in 2006 by Jack Dorsey of the podcasting company Odeo. Twitter has rapidly expanded, becoming its own company in 2007. (Wikipedia, 2010) It currently has over 100 employees. Twitter's offices are in San Francisco, California. (Twitter, 2010)

Twitter is privately held, financed by venture capitalists including Institutional Venture Partners and Benchmark Capital. Twitter has raised over $50 million from venture capitalists in three years. (Wikipedia, 2009)

Twitter's current and projected sources of revenue are unknown. Twitter claims to have not yet implemented a revenue model. (Twitter, 2009) However, Twitter insider documents leaked in July 2009 claim projected earnings of $400,000 for the third quarter of 2009, and $4 million for the fourth quarter of 2009. (TechCrunch, 2009) Whether or not Twitter met these projections is unknown.

In February 2009, Twitter co-founder Biz Stone claimed Twitter's membership had increased by 900% in the previous year. (Marketingvox, 2009) Twitter currently has over 25 million users, and leaked documents project user numbers to reach 1 billion by 2013. (TechCrunch, 2009)


 * Competitive Landscape**

Twitter has no competitors, owning virtually all of the micro-blogging market share. Twitter's user numbers continue to grow exponentially, and a legitimate competitor surfacing is unlikely.

The primary forces driving Twitter's market are:
 * __consumers__ - Twitter's users may decide to stop using Twitter at any time in favor of other pursuits. Reduced user numbers would threaten Twitter's viability.
 * __suppliers__ - The firms funding Twitter may choose not to continue doing so if Twitter does not implement a successful business model to create sufficient revenue. (New York Times Blog, 2008)


 * Business Strategy**

Twitter focuses its strategy on multiple smaller markets:
 * __business__ - Twitter promotes its services for business. Businesses can use Twitter to communicate amongst themselves, with partners, and with customers; to collect real-time market data; and to receive feedback from customers. (Twitter, 2010)
 * __personal__ - Twitter is a convenient Short Messaging Service tool for Internet users.
 * __news and emergency__ - Recently, Twitter has been used to spread official announcements to large audiences. Twitter has been used in this capacity by the Obama campaign during the 2008 Presidential race, by eyewitnesses of the 2008 Mumbai terrorist attacks, and by public health services during the 2009 swine flu epidemic, among others. (Wikipedia, 2010)


 * Implications of Strategy for Gen-Y Marketing**

Twitter may soon be used as a universal communications tool. However, I believe Twitter will collapse first if it does not implement a viable revenue strategy soon.

Twitter plans to implement a revenue strategy relying on its control of the microblogging market. Possible strategies include:
 * __business use dependent__ - Twitter may charge businesses for premium services including e-commerce and customer communication.
 * __personal use dependent__ - Twitter may earn revenue from targeted ad placement or by selling goods directly to users.
 * __news and emergency use dependent__ - Twitter may charge news and public service organizations for premium services.

__References__

Wikipedia. (2010.) //Twitter//. Retrieved January 6, 2010 from http://en.wikipedia.org/wiki/Twitter

Twitter. (2010.) //About Twitter//. Retrieved January 6, 2010 from http://twitter.com/about

Twitter. (2010.) //Twitter 101.// Retrieved January 6, 2010 from http://business.twitter.com/twitter101

Arrington, M. (2009, July.) Twitter’s Financial Forecast Shows First Revenue In Q3, 1 billion users in 2013. //TechCrunch.// Retrieved January 6, 2010 from http://www.techcrunch.com/2009/07/15/twitters-financial-forecast-shows-first-revenue-in-q3-1-billion-users-in-2013/

Miller, C. & Goel, V. (2008, October.) Twitter Sidelines One Founder and Promotes Another. //The New York Times//. Retrieved January 6, 2010 from http://bits.blogs.nytimes.com/2008/10/16/ttwitter-sidelines-one-founder-and-promotes-another/

Marketing VOX. (2009, February.) Twitter Raises Over $35M in Series C. //Marketing VOX//. Retrieved January 6, 2010 from http://www.marketingvox.com/twitter-raises-over-35m-in-series-c-043192//