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As a matter of fact twitter has not yet already started earning but it depicts a huge potential to make funds through the number of people registered with it (Farhi, 7). This section is reviewed in two perspectives: the past funds and its potential for future funds.
Under this section, it will be reviewed how twitter has been operating so far. Twitter has been depending on venture capitalists to run its operations. According VOX (2010), twitter has been involved in a series of venture capitalist funding. In what is referred to as series C funding, twitter is said to have obtained $35M from Benchmark and Institute of Venture Partners. Further, it is reported that twitter was given some amount of funds which are not yet from Jeff Bezos and Spark Capital. Further more in 2007, it reported that twitters was loaned an amount between $1M and $5M. Concerning the funds which Twitters has already gathered Reagan (2010) reports that they have raised eyebrows specifically because twitter does not seem to have a clear path to profitability (p. 324). In the current form the social site has yet to earn revenue but is concentrating on building its capacity and potential to make money as explain in the following section.
Twitter has a huge potential of making huge funds in the future. Its potential lies in its popularity and large of people who have registered with it. These people form ready and potential customers are retailers across the globe (Talbot 1). Most of these funds are likely to come from companies in payment from funds for advertisements made through twitter (Mullman 24; Lessin, 19): “A number of companies, both prominent and less so, use Twitter to manage brand discussions and keep in touch with clients” (VOX 1). It has been realized that people spend a lot time on social sites. This, according to Dumenco (2010), robs people of their, “thoughts, emotions personal expressions” (par. 2). Viewing from the angle of those interested in advertising their products, their products are more likely to get more exposure.
Twitter is likely to start earning big once corporations see its ability to control the market. Learmonth (2009) has a strong believe that the six million users will enable twitter to spring high:
Like its 6 million users, corporations have embraced the service. Its ability to take the measure of what is being said at a given time about brands is a potential gold mine for marketers, and it is the first place Twitterwill look to generate revenue (par. 1)
Learmonth (2009) claims that there are brands and companies that depend more and more on twitter in finding out what their clients require. Makice (2009) has the same opinion and believes that advertising is key to the future revenue for twitter: “Businesses have formed around selling advertising space on Twitter members’ profile pages (Twittad), sponsorship of moments of moments during live-tweeted events” (67). Kennedy (2010) is of the opinion that twitter has prospected on future revenue to flow from businesses which are carried out on it. He gives the examples of such as, “Dell directly measures revenue generated by its multiple Twitter channels; Comcast offers digital care for its customers through a special Twitter account; whole food discusses groceries with over 22, 000 subscribers” (par. 1). According Postman (2008), the Dell Company obtained more than $500,000 in form of revenue from Twitter. Though not all companies may make this kind of money it is an indication of the potential of Twitter (Postman 56; Evans 409). Weinberg (2009) shares the same opinion on the potential of Twitter based on the revenue that Dell is able to make through it (Weinberg 129).
Kennedy (2010) reports that twitter has yet to benefit from, “the thousands of brand connections it currently enables” (par. 1) and further foresees brand monitoring being the first corporate product to be offered by Twitter. On the same topic Learmonth (2009) quotes Mr. Fenton, “What struck us is it gives you an immediate view into what people are thinking or saying about your brand right now, and quickly adds that, There is any number of revenue models that could emerge from that" (Learmonth 1). Another likely source of revenue for Twitter will be the SMS revenue. At the present time, twitter pays SMS fees for mobile terminated and originated messages in Canada and United States.
According to a survey carried out in New Orleans, small businesses are experiencing results from promotions carried out twitter. They range from Chicago yogurt, New Orleans pizza joint among others. According to Klaassen (2009), twitter is helping small businesses to get in touch with the potential customers thus increasing their sales. This as much as it benefits the small business is a potential revenue area for twitter in the future (p. 1). Twitter has taken an initiative to come up with a user guide, “twitter 101” to help businesses use twitter to carry out their business. According to twitter 101 (n.d.), “Twitter connects you to your customers right now, in a way that was never before possible” (p. 1).
This section summarizes the above literature showing the most important points. It is discusses the challenges, the study limitations and makes a recommendation on an area of study with respect to twitter.
From the above review it is clear that twitter has an immense potential to make enough profits in the future. The fact that it has about six million subscribes gives it a good arguing base to obtain funds for corporate advertising. The fact that it has already be possible for companies, for instance Dell, to increase their sales through twitters it is a sure indication that there is potential for companies to increase sales through the use of twitter. Small businesses from New Orleans have also shown that it is possible to increase their sales through the use of twitter. Twitter can also earn revenue from the SMSs sent after their flow has attained a good volume which twitter can use to bargain with the mobile subscribers. Monitoring of brands can also be used to as a source of revenue for twitter.
Twitter faces a number of challenges which tend to threaten it potential for making profits in the future. The most notable challenge is the increase in the number of subscribers who do not raise the potential of Twitter but instead increases its expenditure. Other social sites like Facebook can be ignored bearing in mind companies like Dell uses both Twitter and Facebook in their advertising campaigns.
The research is limited to the use of literature review. Care was taken to ensure that the literature reviewed is credible: literature used is mainly books, journals and websites. Care was taken in the case of using website to ensure that only the most credible one were used. A good number of resources (20) were used to ensure that there are no chances of biases or ambiguity which might accrue to an author.
It is recommended that a research should be carried out on the ethical issues with respect to twitter. This should specifically be targeted at the privacy of the subscribers. There is high likelihood that big corporations may want to track some of their main customers thus they may collude with twitter to frontier information about them showing their lifestyles.
Twitter is a social website used to help people update each other on latest news. To use the facility one has to register with twitter and a group of friends. Messages called tweets which are sent by people one is following to the person or to other people being followed can be viewed. Twitter is reported to have over six million subscribers excluding corporate users who have shown interest in using twitter as a way of advertising. Small businesses are also joining in to make twitter increase their sales through advertising through it. Twitter in this sense has acted has a connecter between the business world and the consumers. This is exactly where their potential lies.
The more twitter is able to act as a connector between the business world and the consumers the more the chances are that it will make money. The potential of businesses groups increasing their sales has been shown by Dell and it is expected that more corporate bodies will join twitter in order to tap into the potential of increasing their sales. This will give twitter a chance increase it revenue. Twitter through the use of advertising charges is likely to make profits. Other opportunities which are likely to tap revenue include the SMS revenue and the brand monitoring exercise.