As Twitter walks slowly up to its initial public offering, let’s take a look at the landscape it’s walking into.
Until now, Twitter’s been competing for consumers’ attention with one-off apps and little startups without business models in place — Instagram, Pinterest, Snapchat.
But as soon as that TWTR stock drops, it’s a whole new ballgame. At that point, Twitter’s publicly traded competitors will be a much broader group (at least, as far as investors are concerned).
Twitter’s stock is slated to start trading between $28 and $30 per share. Where it goes from there is anyone’s guess.
The most obvious competitor is Facebook. As far as consumer social media goes, Facebook is the one to beat — and Twitter’s still a long way from beating Facebook when it comes to userbase, engagement, attrition/retention, and revenue.
After a rocky IPO, Facebook stock has been on a meteoric rise since the summer and is poised for as much greatness as the company’s quarterly earnings statements can afford:
Google is an oldster and a behemoth, but it’s still a Twitter competitor in one major way: identity. Google+ is an underdog in every respect except for the fact that Google freaking owns you. Google knows what you’re looking for (search), what your correspondence says (Gmail), where you live and where you’re going (maps), and in many cases, who you call, what apps you use, and even your credit card information (Android). With all those services quickly falling under the Google+ umbrella, Google’s long game is revealed, and it’s brilliant. Google+ logins are a huge threat to Twitter on the identity front.
LinkedIn might seem like a bit of a stretch when it comes to naming Twitter competitors, but its winning a war for content. While Twitter tweaks its interface and rolls out new features to try to get relevant content in front of you, LinkedIn is quickly becoming the new daily news source for hundreds of millions of people, young and old.
As we watch Yahoo engineer and execute a long-awaited turnaround, we’re struck by the company’s ability to launch beautiful mobile apps. Sure, Yahoo’s not a mover/shaker in the social space, but follow the logic: Prettier apps = more consumer eyeballs = more weight with advertisers = more revenue. All that stacks up to a potential competitor with real provenance and a devastating second wind in its sails.
Every publicly traded online ad company
Constant Contact, Rocket Fuel, Salesforce (recent acquirer of ExactTarget), Millennial Media — the list goes on, around the moon and back 267 times. Slight exaggeration, but if there’s anything we can learn from the world of online ads (and make no mistake, Twitter is an online ad company, first and forever), Twitter is standing on shaky ground.
Investors have sent mixed signals about their confidence in the turbulent and fast-changing world of online and mobile ads. Twitter’s IPO filing stated that a full 65 percent of its ad dollars come from mobile. Yet Millennial Media, a mobile ad exchange on the public market, has taken a brutal beating over the past few months and is currently trading down a full 23 percent.
And don’t forget, Google and Facebook also own online and mobile ad products (and even entire divisions via acquisition), and they’re not doing too shabbily. In fact, Facebook CEO Mark Zuckerberg stated in his company’s most recent earnings call that he expects Facebook to earn the majority of its revenue from mobile soon, as well.
Conclusion: Anything could happen with Twitter’s IPO, but a cursory investigation of the company’s competitors show a battlefield crowded with Goliaths and an even more numerous army of Davids just waiting to take Twitter down — both on Wall Street and in the competitive markets of advertising, social media, mobile apps, and online content.
In the end, someone’s going to be uttering the words, “Ave Imperator, morituri te salutant.“
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