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Thoughts on Twitter’s IPO

Didit Editorial

September 13, 2012: Yesterday, Twitter announced that it’s going public. It did so via a confidential S-1 filing, which allows it to — for the moment — conceal important material details from the public about its offering.

Obviously, we’re going to be hearing a lot about the Twitter IPO in the days and weeks ahead. Will the IPO make retail investors rich or be a flop like Facebook? What kind of relationship will it have with Wall Street – close and intimate, or distant like Google? Will Twitter have real staying power as a tech growth company or is it just a flash in the pan?

I don’t have all of the answers, but one thing’s for sure: Twitter will be a very different company after its IPO and one with a new and powerful core constituency — the investor class — that will materially influence its destiny. Once a company goes public, it is invariably under tremendous pressure to monetize its properties – to extract every ounce of value from its operations — and Twitter will have to change the way it does things to push beyond its roughly $500 million yearly revenue run. If its monetization strategy primarily relies on advertising tactics– and these tactics are not carried out in a very intelligent way — the user experience will inevitably change, and it is clear that the history of tech companies that have inflicted unwanted changes upon their users is very grim.

I explore these issues more deeply in a lengthy article on the site of the E-Marketing Association.

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