Twitter went public yesterday (TWTR), Wednesday, November 6, 2013, offering 70 million shares at a price of $26 per share raising the IPO value to $14.1 billion. (In comparison, Facebook’s IPO last year was $16 billion.)
But today, Thursday, on its first day of trading on the New York Stock Exchange, the stock increased in value to $45.10 and held steady, a whopping 73% above Twitter’s initial offering price and valuating the brand at $31 billion.
The question of course is how a brand which has 230 million users worldwide, but lost $65 million in the recent quarter, can actually hold a value of $31 billion and for how long? Like Facebook and Instagram, finding a revenue model is the elephant in the room—or in this case, a little blue bird.
Where the growth will come from and it almost always does when it comes to new users, is from the youth marketplace.
So, looking at how valuable a property is, is to also understand where their marketplace exists and will be coming from next. Currently, with Twitter, a majority of users are outside of the U.S.—predominately in countries like Brazil and Indonesia–which doesn’t help with their advertising strategy for raising revenue given that most ads are U.S.-based.
Secondly, when it comes to youth culture, the question is whether or not the IPO and therefore next required steps towards monetization will turn it into another Facebook, which is clearly on the decline among youth culture markets (see also our Fall Youth Culture Study 2013).
We have some answers. Based on tracking social networking preferences and communication patterns among 13-25-year-olds for the past 13 years, it’s clear what’s going to take shape next. While financial analysts and brand leaders in certain industries may think the youth marketplace as unpredictable and therefore unreliable, this couldn’t be further from the truth. You just have to know what the marketplace is interested in, and why, in order to ensure loyalty.
Social networks have become the most important platforms for reaching 13-25-year-olds in the United States today. For this reason, knowing where they are moving towards and why is of vital importance to every industry leader and the changes are happening rapidly as illustrated yet again in our Fall Youth Culture 2013 Study. By gender and age groups, the shifts are also unique in that, for example, younger demographics use internet and mobile technology differently than older demographics who may have more money and access to devices such as iPhones. It is here within Social Networks that you can see the “generation gap” happening within youth culture itself, usually starting at the age of 21.
Here’s the latest data on social networking patterns, youth culture, and Twitter:
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