Tristan Rogers, CEO of ConcretePlatform, a provider of collaboration retail software (with clients such as Gap, Levi’s, Tesco, Wal-Mart, Marks & Spencer, Clarks, Mamas & Papas and Jaeger), comments on the imminent Twitter IPO.
“Before the internet, Newspaper Tycoons were powerful men; they owned social comment and they could influence politics. The internet changed that by opening the floodgates to user generated content, news dissemination and freedom of speech. Our choice of information consumption has expanded exponentially. So it is ironic then that in this age of choice, we currently have two Silicon Valley backed businesses owning such a high percentage of personal content and traffic: Facebook and Twitter. And it is this pseudo monopoly that has driven Facebook’s price earnings ratio to 1300, and generated speculation that Twitter could do the same.
A company called Pear Analytics studied 2,000 Twitter feeds over a two week period and discovered that 40% of it was classed as “pointless babble”. From personal experience, I’m surprised it was that low. And this sums up the innate fragility of Twitter’s long term share price.
The promoted tweet and advertising revenue that Twitter will be relying on to support its share price will be largely based on the Twitter populous feeling the need to continue with its pointless babble. Clearly, investors already believe this new social fabric a very powerful thing, judging by the interest Facebook’s IPO generated. With Twitter yet to turn a profit (as was the case with Facebook pre IPO), we are about to watch another fascinating judgement call for investors. The internet is a big place, and the choice of communication channels and mediums continues to grow. How attached in future hundreds of millions of users will be to their 140 character meanderings is the billion dollar question.
Before the internet, Newspaper Tycoons were powerful men. I wonder if history could repeat itself?”