You, my friend read iBankCoin daily, therefore it is a requirement that by the time you finish up and close your browser, your stock/financial/company IQ will be significantly higher than the inferior average person. Yes, your frequent visits to iBC will equip you with the knowledge and swagger to dominate every conservation about stocks…
Friend: Hey man, I bought some IBM stock.
You: What a coincidence. I gave a monkey a pencil and he circled that same stock too.
…You should be able to shout out the CEOs of products that your friends try to introduce you to….
Friend: Dude, have you seen Google Earth? It’s way trippy man. I think I can see my car!
You: Oh, you mean the product of Eric E. Schmidt who invested in Matthew O’Connell‘s GeoEye-1 high-resolution commercial imaging satellite to send back images to Google’s mapping system? I heard a little about. In fact I installed it on my grandma’s BlackBerry Bold. Can you even get Google Earth on your Razor?
And of course, by reading iBC you will [unfortunately] be able to wow that nerdy girl with hairy legs that sits in front of you in your discrete-mathematics class by telling her all the different companies that built each component of your iPhone.
Unpleasantly looking hairy woman: Hey, I like your iPhone. Can I touch it?
You: My friend has a Razor, I think you should touch that instead. And I’m not talking about a Motorola.
Hot girl: Hey nice phone. Can I touch it?
You: Sure! Did you know BroadCom (BRCM) makes the components to support that touchscreen? And a little company named SkyWorks (SWKS) handles the power amplification for the receiver? It’s amazing stuff. I love amazing stuff… So, Miss Amazing, tell me about your components.
Hot girl: Ew. Get away from me you creepy nerd.
So anyway, that got me thinking about more popular products that people are using, but don’t know a thing about them. I mean, people, your friends, your girlfriends, relatives… whatever … they all see a product, but they only look at them from a consumer’s point of view. We here look at something, dissect it, and tell you all about that company’s revenues, shoddy accounting principles, CEOs, and market potential. So let’s get to it and talk a little about Twitter and FaceBook, two products that are becoming household names.
Twitter vs FaceBook
So let me ask you this? Who is the founder of Twitter? If you say Howard Lindzon I will throw a pineapple at your face. The answer is Jack Dorsey, some software engineer who did what every other software engineer wish they did- simply create a giant chatroom and SMS-messaging-of-the-internet technology. See! You’re smarter already. In February 2009, Twitter ranked 3rd in social networking sites, trailing MySpace (2) and FaceBook (1). I’m pretty sure they’re #1 now. FaceBook was founded by Mark Zuckerberg… his last name is much cooler and easier to remember. I wonder why.
Can They Be Profitable?
I do have a twitter (“thehawaiitrader”), but not a FaceBook, so maybe I’m biased here, but I think Twitter actually has a better chance at making revenue than FaceBook. The problem with Twitter though is that it’s all just a game to many people. But to me, within the game, I see Twitter accomplishing what Google’s Search Engines cannot do… accessing consumer demand on the spot! That’s very valuable content, and if Google doesn’t understand that, they are behind the curve. Google matches ads with a user’s search, but Twitter has the ability to match ads with user’s conversations, thoughts, and other streams of conscious. Here are some examples…
- Let’s say you tweet, “I’m hungry”, you could get a number of replies from local restaurants with links to their latest deals, special of the day, buy-1-get-1 free kind of stuff. There’s actually a lunch wagon in LA that serves Korean-Tacos, and they tweet the location of their wagon every night! Crowds of people flock there. It’s hilarious, but we’re all jealous.
- Let’s say you tweet, “Was Taken a good movie?”, then NFLX can send a response telling you when the movie is available and if you want to add it to your cue.
- Customer relations: Every company in America will soon have their own Twitter account, with some PR girl in charge of sifting through tweets to find people talking about their products, then proceed to offer assistance.
- Content is probably the most valuable thing here. If you use Twitter analytics you can track what people are talking about right now. What’s on their minds, what they hate and what they want. I’m sure companies, and even Google, could profit from that.
(this is the lunch-wagon that tweets their location! sheesh. Go Kogi-BBQ!)
What about FaceBook, can they be profitable? I’m just not convinced with them. It reminds me of Ringo, or MySpace. In fact, it reminds me of a photo-album. Posting pictures of families doesn’t tell a supplier much. It’s not quite as ground-breaking as YouTube, so if any of the big boys were to go shopping, they’ll probably pick Twitter over FaceBook. Then again, I could be wrong, it looks like there already is some shopping going on for the Face… Digital Sky Technologies of Russia, offered about $200 million for some p-stock. Russia? What’s in Russia? I thought all they have there is snow and snow and, more snow. A bunch of profile pictures of fur-hoodies and ear-muffs.
Threats, Evil Threats
Both Twitter and FaceBook have the daunting task of staying as a perceived necessity, and not fade into the background as a trendy item of 2009. This is real hard to do, I mean look at Napster. Great product, but bad managing and PR, and AAPL just came along and stole their idea and gave the world iTunes… a monster sized cash cow for Steve. That copy-cat threat exists strongly for FaceBook; Twitter has to worry about fraud, fake Twitter accounts (like “KanyeWest”), and spam.
With that said, if Twitter ever goes public, don’t expect it to be an instant home-run, but looks worth a try. Shoot, I’d buy. More importantly, I do think this social-media phenomenon we are experiencing is what will change the face of consumer activity drastically in the near future. You can be sure companies everywhere are tuned to that.