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Why Twitter Might Be Worth 700 Million Dollars

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Just how useful is this "social utility"?

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Some Kevin Wassong guy pens a piece entitled I Tweet, and I Don't Know Why:

"I consider myself an early adopter of technology. I had all the first Apple (AAPL) computers - and still have them. I also was online in the early '90s through Prodigy - and I even had Pointcast. (Hopefully they'll bring that one back, now that bandwidth has caught up with the times.)


"I've worked in technology and the Internet for almost 15 years; I've seen companies come and go. I've lived through the dot-com boom, the bust, and the resurgence. There have been a number of occasions where I've asked, "What am I missing?"

"Twitter is one of those occasions.

"I tweet, but I have yet to figure out why. I have also yet to figure out how Twitter can make money.

"What am I missing? Twitter is a $250 million company? Really? It's actually just instant messaging, but it's semi-useless unless you have a tremendous amount of time on your hands, or took an Evelyn Wood speed-reading course.

Are people willing to pay to broadcast the most mundane crap about their daily lives? The better question is: Don't we have something better to do than read about the mundane crap that happens in someone else's life?"


It's a great question. I can't adequately explain Twitter either. In fact, that very subject came up the other day, and I was all over the map trying to describe it. Best I could say is that it's a broadcasting medium where anyone who wants to can see what you have to say, while you in turn can listen to anyone you would like to. In 140-character bursts.

I would agree that the mundane is... incredibly mundane.

I do find utility in it, though. As a short-term trader sitting in the comfort of my own home most workdays, I have my basic Twitter feed, as well as the Stocktwits feed, running on Tweetdeck at almost all times. And I would sincerely miss them if they went away. I think of Twiiter as the virtual version of a trading crowd - a rather large one, where unlike in real life, I can tune out anyone I feel like tuning out. And, as in any trading crowd, you spend part of the time sharing trading ideas, and part of it on some off-topic nonsense.

I also like it as a tool to share longer-form material. That's a fancy way of saying I throw links to myself out there and generate some extra traffic. But it works both ways, as my followers throw a bunch of interesting links out there that I may never have seen otherwise.

So Twitter fits me. And I imagine it fits other lines of work. But, by the same token, it's a complete waste of time for many people. And, socially, it isn't going to replace Facebook anytime soon. In fact, Facebook is already tacking on Twitter-ish sorts of features.

As to how this ever makes money for Twitter... I have no clue. It sure seems like any company can create their own Twitter replica. And it also seems like there's cash potential in Twitter apps, which -- thanks to the fact that third parties can write programs and services for Twitter -- does not make any actual money for Twitter.

So maybe their whole plan is to just get up to a certain critical mass, then let some acquirer figure it out. That's their problem, though.
No positions in stocks mentioned.
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