What Twitter’s $200 Million Cash Infusion Means to You

Twitter’s been making the news a lot lately, notably for its relatively low usage among US adults. The other day, the social media platform’s valuation jumped to $3.7 billion with its $200 million cash infusion from Kleiner Perkins Caufield & Byers, new home of Internet analyst Mary Meeker.

Twitter’s recent high valuation reveals expectations that the social media platform is positioned for further growth. The data shows that its recent activity is significantly different from that of the original users. Here are some of the Twitter data highlights worth considering according to Sysomos’ recent data.

  • New Twitter users increased by over 100 million in 2010.
  • Less than 5% of Twitter’s users were on the service before January 2009.
  • Users have increased average number of followers and amount of information shared.
  • 22.5% of tweets account for 90% of activity. Roughly 80% of users have made less than 500 tweets.

Another point worth noting is that Twitter’s growth isn’t limited to the U.S. At the beginning of 2010, the U.S. accounted for roughly half of all Twitter users followed by the U.K. and Brazil. Interestingly, U.S. users generate a greater proportion of tweet content according to Sysomos. (Note: This is consistent with Forrester’s social media activity research earlier this year.)

Twitter’s top trending items for 2010 are a mashup of breaking news, pop culture and technology that can best be described as People magazine meets Wired.

Reflecting its international character, three of the top ten words relate to World Cup Soccer. Here are the overall top ten Twitter trends:

  1. Gulf Oil Spill
  2. FIFA World Cup
  3. Inception
  4. Haiti Earthquake
  5. Vuvuzela
  6. Apple iPad
  7. Google Android
  8. Justin Bieber
  9. Harry Potter & the Deathly Hallows
  10. Pulpo Paul

What the $200 million cash infusion means

The $3.7 billion Twitter valuation implies an underlying assumption that its revenue streams will expand. While social media consumers may not like the prospect of advertising interspersed with their communications, Twitter has limited options for revenue generation. They’re advertising, subscriptions or a combination of the two. For Twitter, the challenge is that that many people get Twitter content on other applications so advertising must be integrated into its feeds. Here are six potential ideas for how Twitter may grow its sales.

  1. Increase the usage of promoted tweets and trends that can be integrated into Twitter feeds. According to the Wall Street Journal, over 80 top brands have signed up for advertising services since April 2010.
  2. Develop other forms of sponsorship that engage users without compromising the content and/or pissing users off.
  3. Create pay for placement options such as auto re-tweets or message placement every X tweets in users’ streams.
  4. Expand company account functionality such as higher number of tweets per hour.
  5. Use Twitter feeds for cross platform media integration. For example, tweets could be integrate with television and appear during viewing.
  6. Sell Twitter data in the form of customized analysis.

For the time being, both users and marketers will have to wait to see how Twitter expands its offering and whether this investment was worth it.

What products do you think Twitter will rollout and why?

Happy marketing,
Heidi Cohen

For further reading, here are other Twitter resources:

Note: These proposed products are my recommendations. They are based on my knowledge of the online media marketplace.

Photo credit: Twitter icon via Smashing Magazine.

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