Why Twitter is so valuable to Arabia and it’s not the IPO

Posted on 03 January 2012 with 1 comment from readers

What the value of Twitter, the US-based, social media, micro-blogging website? Rupert Murdoch signed up for this free service last weekend. Will he find it valuable enough to invest in an upcoming IPO?

Yesterday ArabianMoney editor and publisher Peter Cooper was on the Emirates 24/7 show, a local TV news analysis program, discussing the value of Tweets – the tiny messages sent by users – and whether they belong to employees or employers.

Arabian Spring

That might seem an irrelevancy, and indeed the next topic of conversation was the unrest in Syria, a far more sobering discussion. But of course Twitter is not so far removed from that crisis either.

For most Arabs the real value of Twitter has been as a communication device in the Arab Spring. Protestors follow the Tweets to the next event and keep in touch through this real-time online media.

The mobile phone generation has a new friend in Twitter. Mr Murdoch immediately connected with 26,000 followers, something that must have impressed a media mogul used to spending more time and money assembling a circulation.

From an advertising perspective this value will not be lost on him either. Twitter can target its user profiles down to age and job-type and is therefore potential gold to advertisers.

Websites like ArabianMoney.net can attract high value advertising and sponsorship because they focus on serious content with defined audiences. But social media does have the edge with high volume and specific targeting.

That said, who actually reads Twitter? Mr Murdoch or some young actress might attract followers but what of the serious news? Well ArabianMoney does have some followers on Twitter already it is true.

No readers?

However, if a media is mainly one-sided with most users posting Tweets by the billions that nobody actually reads then does it have a value? Who reads Twitter?

It is the ultimate nonsense publication that nobody reads, except when they want to know where the next protest is about to happen in the Arab Spring. Is that a media or a stream of SMS messages?

Investors considering the Twitter IPO are thus going to be back in the dot-com days of gambling on market perception rather than reality. And from Twitter’s point of view it ought to get on with an IPO before the real value of Twitter becomes apparent.