Tag Archive | Twitter

E-commerce on Twitter, introducing the ‘’Buy Now’’ button.

Social media companies have always struggled with monetizing the big user base that they have. Especially Twitter, the social media platform that lets users send out 140-character messages, has been operating on investment money instead of profit. At the time of their IPO, Twitter was making $500 million dollars in revenue but did not make any profit.

Although Twitter is not profitable, it still had a valuation of $24.9 billion at the time of IPO. But, if there isn’t any profit, what is that valuation based on? The answer is innovation and the prospect of monetization. Many big companies have been outcompeted by startups that applied innovative business models. For instance, Blockbuster got replaced by Netflix and Barns & Noble got replaced by Amazon.

Social media are replacing our old ways of communicating. The reach and influence of Twitter has become enormous but profits are lacking behind. Still, Twitter is valued highly because investors predict that Twitter will find a way to monetize on their influential position in the social media world.

That moment of monetization might just be upon us now. Twitter is introducing their ‘’Buy Now’’ functionality. In September 2014, Twitter started testing a way to buy products directly from their site and app. Together with payment-startup Stripe, they have developed the Buy button. This button enables retailers to turn their Twitter account into a web shop. Consumers just add their credit card details to their account and click the Buy button whenever they see a product they like on Twitter. Of course, part of this revenue will go to Twitter.

Twitter is a great example of the value of the network effect. First, they created an enormous network of people relying on Twitter to stay up-to-date. Only after the massive user base was established does Twitter introduce ways to turn that network into large revenue.

The monetization will not end with the Buy button. Recently, a MKM Partners Internet analysist stated that Twitter can reach a $100 billion valuation if they find more ways to monetize and improve user experience. That statement alone made Twitter stocks rise significantly and Twitter will work hard to reach the ‘’unicorn status’’ that is a $100 billion valuation.

Although Twitter is finally monetizing, many still call Twitter and other startups overvalued. Do you think that Twitter is overvalued or not? Share your thoughts in the comments!

Sources:

http://www.bloomberg.com/bw/articles/2013-11-18/what-we-learned-from-twitter-s-ipo-the-value-of-innovation-is-at-an-all-time-high

https://blog.twitter.com/2014/testing-a-way-for-you-to-make-purchases-on-twitter

https://blog.twitter.com/2015/more-ways-to-sell-directly-on-twitter

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TWITTER WITHOUT LIMITS

Twitter Increase Character Limit

As you might have heard in the past few weeks Twitter is considering removing the 140-character limit. Currently, Twitter is creating a new product that will enable users to share tweets with an unlimited amount of characters. But what does this mean for the future of twitter? There are various characteristics that separate Twitter from other social networks but the 140-character limit has always been the most important trademark of Twitter. Twitter has been under scrutiny about this for years and many have argued that Twitter should expand the limit. But now that this might actually happen, will the users see blocks of text on their timelines? Or will it be a separate blog-type of service? This change will certainly have an impact on marketers who use Twitter to connect to consumers. Due to the longer content that will crop up almost immediately after the change, marketers will have to spend more time writing the body of tweet. This could create a shift on Twitter from many, small tweets throughout the day to fewer, longer tweets because marketers will not want to deplete their own time and resources and alienate consumers who may unfollow if they feel bombarded with content.

Lifting the limit might seem like a good thing, however, will Twitter be able to differentiate itself from other social networks after this implementation? This change could be detrimental to the unique community of writers and creatives who have found a home on the platform. The inconvenience of the 140-character limit has forced Twitter users and marketers to become better writers and salespeople. These parameters have taught Twitter users to develop their own unique style and flow. The only downside to the limit is that there is not much room for nuance. Twitter user must create a thread of tweets in order to show a progression of thought. However, this separation actually allows followers to process information much more seamlessly. After practicing marketers can learn to use the limit to their advantage with more precise and to the point content, as the most successful Twitter users manage to be both poignant and witty in bite-sized portions.

Not only is Twitter a platform where ideas are exchanged constantly but it is also a platform that turns minorities into targets of harassment by trolls. If Twitter is strongly considering lifting the 140-character limit ban, it must first put in place stricter anti-harassment regulations. Without the character limit trolls will be given more freedom to attack. This can cause the number of Twitter users to decline while Twitter is desperate to find new ways to attract users to the product.

Twitter wants to improve its appeal to the mainstream social media users, who do not know how to interact on a 140-character landscape. Removing the 140-character limit is a way to achieve that and will provide new readers of marketers’ content. However, the question arises whether or not this would actually increase Twitter’s audience. Twitter’s 140-character limit has force innovation in language and art, and created a platform perfectly tailored to facilitate instant interaction and community building. Instead of eliminating the characteristics that make Twitter unique among its competitors and the power these innovations have, Twitter should focus on making it secure for users and use this opportunity to improve this innovation and differentiate even more. Do not mess with what is not broken. Or do you think otherwise?


Sources:

http://www.adweek.com/socialtimes/twitter-might-ditch-the-140-character-limit-what-this-means-for-marketers/627672

http://recode.net/2015/09/29/twitter-plans-to-go-beyond-its-140-character-limit/

http://qz.com/515256/twitter-will-ruin-the-one-thing-that-makes-it-stand-out-by-changing-its-140-character-limit/

http://www.programmableweb.com/news/twitter-removes-140-character-limit-dms-updates-api/2015/06/12

Why API-Centric Software Will Dominate the Future

Why API-Centric Software Will Dominate the Future

There are thousands of apps around. For multiple platforms (iOS or Android) or in multiple browser. You probably use them on many devices: Your phone, tablet or laptop. But all those applications have very limited functionality on their own. Only by communicating to their user, connecting them between each other and swapping all kinds of information they become powerful.

And that’s where APIs come in. API stands for Application Programming Interface and describes the information and rules software programs interact with each other.

The traditional way of development focusing on web frameworks (e.g. Microsoft .NET, Ruby on Rails, PHP) can require costly integration into other software when not set up properly. Adaption to special needs can easily amount to a project in middle five figures.

An API centric piece of software executes most or all functionality through API calls. So why is this important?

API Centric Design

Source: Nikko Bautista

API-Centric Design

With API-Centric Design the core function of a software (for example the Twitter Stream of new Tweets) is build separately from the way a user accesses it (in our example Twitter can be accessed through a browser, an iOS app from an iPhone, iPad, Android devices, aso.). There is only one core product running in the background and then many different customized front-end ways of accessing the core product running in the back-end. All the communication between those parts happens over? You guessed it: APIs!

No more changing and tweaking the core product because on a windows phone was a display error. You just handle that over the windows phone front-end client.

Bah…. that was a lot of techie talk. So what?! Well that brings us to our next big thing:

The Internet of Things

There are estimates that until 2020 there will be more than 50billion connected devices. That’s a lot! And it will shift who and what communicates over the internet. Today people communicate with people or people communicate with machines and systems. But in the age of the internet of things systems mostly communicate directly with systems. And they don’t care about pretty graphical interfaces on some gadget with touch screen. For those systems to work you need solid APIs connecting many back-ends fast and in a reliable way. And what would be more suitable for this task than software created through API Centered Design?

Oracle recently released an API Management Tool. So did IBM and Intel. These big corporations undertake those steps to be well prepared for what is about to come: The internet of things. It’s gonna be a paradigm shift.

But Where is the Money?

APIs aren’t new. And there are a lots of them. In the Programmable Web Database are more than 14’000 APIs registered. But with the emergence of mobile and the internet of things, they’re in the spotlight again. API centered software enables micro services that fit a specific need an solve a well detailed problem. Other programs can build upon existing APIs using their functionality to expand and build their own. This layer structure can help to automate tedious tasks by integrating and arranging the right APIs. There are many offerings already that allow fast creation of API-based back-ends (e.g. Treeline or Stamplay). APIs therefore build a solid foundation others can build upon. Google does that for a while already and offers a ton of APIs for others to use (e.g. Google Maps). But if you and especially your users call them regularly you have to pay for them. And they’re not cheap:

Google Maps API Prices

Google Maps API Prices

This example brings us to our first business model with APIs: If you’re providing some service that is of value to others, you can charge for every time a user or program is calling your API and uses its functionality. Even if it’s just a couple cents per call, if your API gets used thousand times a day, that’s steady income.

Another business case is to offer your API for free and animate other developers to build upon your existing API. Through  referrals from that software you then generate additional sales. Uber does this with success: By offering their API for free they animate developers to build upon their core product. If someone signs up for Uber through another program that uses the Uber API, they pay the developer who build the new product a commission of $5-10.

There will be many more business models emerging around API. Especially connected to the Internet of Things. The paradigm shift opens up new business opportunity ready to exploit.

What  business models including APIs do you see? I’m very interested in reading about them, so please leave a comment!


Sources

http://blog.cloudoki.com/the-new-era-in-software-engineering-api-centric-design/

http://apigee.com/about/blog/technology/api-centric-architecture-all-development-api-development

http://techcrunch.com/2015/09/27/the-future-of-coding-is-here-and-threatens-to-wipe-out-everything-in-its-path/

http://www.infoworld.com/article/2920792/apis/ibms-next-big-bluemix-move-api-management.html

http://www.thestreet.com/story/13259862/1/intel-stakes-future-on-internet-of-things-at-developers-forum.html

http://www.programmableweb.com/news/oracles-api-management-portfolio-aims-digital-enterprise/press-release/2015/06/02

http://www.zingdesign.com/top-10-web-development-trends-and-predictions-for-2015/

Technology of the Week “B2C e-commerce”: The future of shopping

deprives-you-of-tangibility

Since the rise of the internet in our everyday life, a lot has changed. Firms had to revolutionise their product strategies, adapt to a whole new 4Ps conception, and serve a whole new platform of markets, namely e-markets. The trend of e-shopping was then introduced in order for firms to increase sales via the e-commerce channel. This lead to further innovations in order to contrast the vicious competitive environment of e-markets, while trying to transfer the in-store shopping experience directly online. With that being said, this article will introduce two new emerging technologies that are involved in the realistic transition between in-store and online shopping through Augmented Reality (AR).

Social Shopping

Social shopping is an e-commerce methodology bridging social media and online shopping together. Social media impacts the shopping behaviour in a way in which other people like friends, family, bloggers and celebrities recommend and suggest certain products and services to the consumers. The idea behind a social shopping website is that it provides the potential customer with blogs and virtual communities to help him in his decision in buying consumer goods and services. This is achieved by the average consumer share his shopping ideas, exchanging opinions on products, and recommending one another on what to buy and what not to buy.

A research on social shopping in 2010 found out that consumers’ trust in product recommendations had not only a direct and significant positive effect on their purchase intentions, but also a strong indirect positive effect on buying the product from that specific website where the information was originally found. The intention of a consumer to purchase a good directly from the website could in that case directly be affected by the trust in the website, thus creating an incentive to build a online shopping platform (Yu, 2010).

To better understand this, we used Shopcade as an example to analyse the technology further, and base conclusions.

shopcade

Shopcade is a website and mobile app that creates a community of fashionistas and allows anyone to easily purchase the items that they see posted. The site has two main sections: the trending section and the feed section.

The trending feed is curated by the app itself. This means that it is a section with content posted only by the Shopcade team. This content comes usually in the form of blog posts regarding different fashion trends, whether it is for clothing, accessories or other items (for example, one post gave the most recent trends in duvet covers). Being a content provider as well as a service provider definitely adds value for the customers of the company. On the other hand, the feed section contains content created exclusively by bloggers and members of the community. This adds even more to the social aspect of Shopcade, giving a very Instagram-like feel to the whole social experience. This is what Shopcade does successfully. It actually created a situation where online shopping offers an experience that would be awkward to achieve in the store.

Below, the SWOT analysis of Social Shopping can be observed. It is directly applicable to the case of Shopcade.

Schermata 2015-09-24 alle 18.43.52

When it comes to their revenue model, Shopcade offers nothing new. As can be expected from such a business, they make money from affiliate marketing and sales. This means that they receive commission for all the purchases made from their website. In addition, some brands want more exposure, which requires them to pay more money to Shopcade.

Virtual Fitting Room (VRF)

Fitsme-has-built-a-virtual-fitting-room-platform-that-can-be-easily-integrated-onto-the-sites-of-online-retailers.

VRFs are the online substitution of in-store fitting rooms. It is available on PC-laptop and mobile devices. VFRs rely heavily on Augmented Reality (AR), which employs specialized software and hardware to merge the digital and the physical worlds by immersing digital information into real video to generate persuasive looking scenes in real-time. Personal measurements can be included online to allow the framework to build a 3-D avatar of the customer fitting the item. It’s built on a three-step algorithm: it builds/scan the user body through data measurements (size, width, length…), reference points (i.e face and figure) via AR, and finally, it builds the avatar incorporating the clothes on a superimposed 3D image.

Software companies such as Virtusize, Fits.me and Clothes Horse have all adapted this new technology providing it to big retail companies, attempting to tackle the fit challenge with a range of technology-based solutions, from “morphing mannequins” to size recommendation engines, all with the goal to simulate the physical fit and sizing experience (G. Randall, 2015).

Often enough shoppers complain about long waiting lines in shops and poorly set up fitting rooms. Conditions such as terrible lighting and a lack of space in the room tend to dominate the endless list of complaints. The slow but steady introduction of VFR has revolutionised the shopping industry, specifically the e-commerce aspect of it.

Using VRFs could actually increase the pleasure of shopping in many ways. Firstly, there is no hassle of having to physically put on several different clothes. The ability to take pictures whilst “trying on” these clothes means that customers can easily compare outfits. Furthermore, many side-menus can be added into the technology, this would be up to a firm to research what sort of features its customers need when trying on clothes. Some great features that many shoppers and experts posted include the ability to like and dislike garments, save pictures of outfits for later, see reviews and prices of products, as well as the ability to call in real-time service (LinkedIn, 2015).

Below, the SWOT analysis of Social Shopping can be observed, applicable to every aspect of the VRFs. As it can be observed, it is filled with opportunities leaving thoughts and space for improvement.

Schermata 2015-09-24 alle 18.53.09

Future perspectives

With the VFR component only, the customers missed the social element of shopping. On the other side, the current social shopping services do not offer a developed VFR experience yet, making a visit to the store easily a necessity. We believe these technologies will merge together as the result will provide an improved customer experience. In the future those various digital resources – VFR and Social Shopping included- will be combined in an overall bigger market. Indeed, as someone will be shopping from his home -trying out clothes through the VFR system-, the person will be able to ask the opinion of a friend or a shopping assistant; involving social shopping (IBM, 2010).

The combination of those two technologies presses the question whether physical retail shops will exist in the future. It seems not to be a question of “If” but “When” physical stores will become obsolete. The reader should ask himself in how much time this change would have taken place: 5, 10, 20 years? It is difficult to say. Humans tend to think linearly, however the rate at which technology imposes itself on the world rather corresponds to an exponential curve as Ray Kurzweil and the institution of Singularity University (2012) are professing.

Sources:

Yu, K.-L. H.-C.-Y.-P. (2010). Antecedents and consequences of trust in online product recommendations”, Online Information Review.
Randall, G. (2015). Fashion ecommerce: are virtual fitting rooms the silver bullet?. [online] Econsultancy. Available at: https://econsultancy.com/blog/66058-fashion-ecommerce- are-virtual-fitting-rooms-the-silver-bullet/ [Accessed 18 Sep. 2015].
LinkedIn (2015). Virtual changing rooms will revolutionize fashion retail [online] Available at: https://www.linkedin.com/pulse/virtual-changing-rooms- revolutionize-fashion-retail-moles-mba

Team 13:
Claudio Corti
Maximilian Wiedmaier
Alex Furnica
Maxim Gggurevic
Paul Grandjouan

Twitter Beating Facebook in Race to E-Payment

Twitter users in France can now tweet money to their followers. This effectively means that Twitter has beaten Facebook by being the first to introduce P2P transfer of money over their own platform.

Social networks have been in a race to implement integrated e-commerce solutions on their website. Facebook was the first to introduce e-commerce solutions (e.g. Shopify), but the possibility to transfer money is still missing. However, Facebook is rumored to already have applied for the relevant licenses for the ability to transfer money. An interesting addition to this is that Facebook has hired former CEO of PayPal to head their messaging division, which hints that in the future e-payments might be included in the functions of the Facebook Messenger.

BPCE (the second largest French bank by number of customers) has teamed up with Twitter to enable anyone with a bank account in France and a Twitter account to make use of the service. It is not yet clear if the transfer would remain private or if it would be shared with followers, as it is done on Venmo (owned by PayPal). Further details should be available after the company’s press conference in Paris on Tuesday, 14 October 2014.

This initiative is following Twitter’s introduction of a „Buy” button last month, which was the platform’s first direct step into e-commerce. Nathan Hubbard, head of e-commerce at Twitter stated, that conversations between brands and other users were mostly transactional, thus the enabling of selling directly through the platform was an obvious next step.

As S-Money, the subsidiary of BPCE coordinating the payments through Twitter mentions on their website, the payment mode should be simple, free, quick and most importantly, secure. As payments through social networks should be gaining importance in upcoming times, banks are faced with new challenges, including their decision whether to be included in this trend.

Would you use such systems to transfer money through? And do you think all banks should move in line with these developments?

Sources:

http://www.shopify.com/facebook

http://www.reuters.com/article/2014/10/12/us-twitter-payments-idUSKCN0I10UV20141012

http://www.ft.com/intl/cms/s/0/6f6c273c-525b-11e4-b55e-00144feab7de.html?siteedition=intl#axzz3G0urq3sI

http://gadgets.ndtv.com/social-networking/news/now-transfer-money-via-twitter-if-you-live-in-france-605961

http://www.s-money.fr/blog/actu-smoney/s-money-lance-le-paiement-entre.html

How the NS handles Twitter

There are enough companies who tweet just to tweet. Create an account, once a week send a tweet and never look beyond what others say. Simple and it does not cost any extra money, after all sending a tweet is just a mouse click away. Occasionally there will be a new follower and the company also follows every follower. The question is, however, do you really follow everybody?

You start with simply “follow” someone, actually read all the tweets is a second. And then even respond to tweets is for many companies a very different story. But sometimes, just sometimes, there is a company that really knows how to deal with Twitter. Respond quickly is a must. These companies passed the stadium of “just check my Twitter account during the coffee break”. It has become an effective call for one or more employees.

#NS

Do you travel frequently by train and do you use Twitter? If so, you’ll know the Twitter profile of the NS (Dutch Railways). Since March 2010 they’ve send over 315,000 tweets. With over 110,000 followers, NS is one of the companies most discussed. Commonly used hash tags to messages with the NS are #fail, #vertraging, #Utrecht and #ns.

Read More…

Referrals? Why should we use them?

Referrals are already very powerful to use; according to some; but why are they useful for a company? Nowadays people can refer a product or service to other people by social media. Most of the times you buy a product and you can refer it to friends, family, colleagues and others. In this way companies try to use word-of-mouth in the online environment. Word-of-mouth is a very powerful tool, because people are more likely to buy products when they hear from friends or experts that it is a good product. So it is likely that referrals are powerful for companies.

social_media_referrals

The article A. Green (2013) suggests that companies should use referrals, because they are a powerful tool to convince people to buy the product. But companies do not know how they should use it. Most companies stimulate referrals at every social media platform where the companies should look which platform has the most interaction and referrals. For some companies it might be useful to use Google+ where visual companies could make better use of Pinterest and Instagram. The article states that 60% of the social media traffic comes from referrals and that the conversion is the highest among people that were referred to the website.

Traffic-by-Source

The table at the right shows he different kind of visits to a website by different kind of contact points. Most people got to the website by an organic search engine like Google or go to the website directly. After this the highest way people got to the website were referrals. But even though organic search got more visitors to the website, referrals has an conversion rate of almost 4 times higher than organic search. This means that people that go the website by a referral are more valuable customers for the company than customers that go to the website in any other way. Referrals are part of the social media platforms, but this research separated them. The table shows that more people go to the site by referral than social media. This implicates that it is more useful to make interesting posts than to redirect customers to a new product on you website by making a Facebook post.

Referrals also benefit the brand awareness of the company. Referrals increase the exposure of a post, because people send it to people they know who will get a positive view of the company. Because when your friend likes it, it must be a good company right? In this way companies should not focus their social media strategy on promotions or other type of commercial activities. Companies should focus their social media strategy on producing interesting posts that make people enthusiastic, exited and people need to find it interesting to share the post to other people they know. In this way referrals themselves can be more powerful than social media posts.

Sources:

http://socialmediatoday.com/agreen1019/1794401/do-social-media-referrals-have-future-your-business

http://www.business2community.com/social-media/the-future-of-social-media-50-experts-share-their-2013-predictions-0326316

http://socialmediatoday.com/sashattuck/1394651/want-increase-conversions-focus-referral-traffic

The rather pessimistic reception of Twitter’s IPO

Afbeelding

Twitter would like to go public, as it announced in an appropriately delivered Tweet last week. The first thought I had was rather positive, but as soon newsmedia picked up this message, the sentiment on this IPO rather quickly drawn a lot of comparisons to Facebook’s initial public offering, and I was quite surprised by this pessimistic sentiment, as another big tech company from silicon valley enters the stock market. So in this blogpost, I would like to share some positive reflections on this IPO. I thought it would be interesting to place an emphasis on a medium that is highly academically used in this course and related research, but also on the implication side, as its IPO should have an impact for the users of Twitter?

(You all know Twitter, so I will not bother you with a general introduction)

On September 12th Twitter revealed via its own micro-blogging service that it had begun a process with America’s Securities & Exchange Commission that should ultimately lead to an initial public offering (IPO) of shares in the company. Should the firm’s plans go through, the IPO is likely to take place in 2014. Twitter’s listing will be the most eagerly anticipated tech-company flotation since Facebook’s, early last year. Twitter’s listing will be the most eagerly anticipated tech-company flotation since Facebook’s, early last year. The company yet is worth billions upon billions of dollars, and its founders will become extremely rich sometime in the next year. But Twitter, as we experience it, is also set for a radical redesign sometime soon. The company’s finances are set to change; but its looks may be changing just as much

Avoid a debacle like Facebook’s IPO
Of course, Twitter’s hope is to avoid its IPO turning into an overhyped debacle like some other technology companies. Facebook’s IPO, in particular, is seen by Twitter executives as a cautionary tale, the source said. Asked the other day if he had any advice for Twitter’s expected public offering, Facebook CEO Mark Zuckerberg joked “I’m kind of the person you would want to ask last on how to make a smooth IPO.”

But I think, alike with some others I found; Twitter’s IPO will be significant for several reasons:

Timing
Twitter is going public sooner than Facebook went public. Zuckerberg waited more than eight years to conduct a Facebook IPO and by the time he made the decision to go public, primarily due to CEO Mark Zuckerberg’s notorious dislike of public markets, public disclosures, and public pressures to perform, there was so much hype and pre-IPO money invested in Facebook that it almost made the IPO unmanageable.

Secret IPO Filling
Keeping its IPO filing secret until the last minute could help Twitter avoid the overheated anticipation that Facebook had to deal with ahead of its disastrous IPO. It could keep its financial details away from rivals for a few extra months, as it grows a mobile advertising business that might compete with Facebook’s or LinkedIn’s. And if Twitter would rather keep some of its early history under wraps, it could avoid an outside audit and submit just two years of financial statements, as opposed to the customary five.

Advice of Facebook’s Zuckerberg
Twitter’s hope is to avoid its IPO turning into an overhyped debacle like some other technology companies. Facebook’s IPO, in particular, is seen by Twitter executives as a cautionary tale, the source said. Asked the other day if he had any advice for Twitter’s expected public offering, Facebook CEO Mark Zuckerberg joked, “I’m kind of the person you would want to ask last on how to make a smooth IPO.” Zuckerberg not only overcame a very challenging post-IPO period as he successfully transitioned Facebook to being more of a mobile business, he also learned something from the process and recently gave this advice to Twitter.

Powerful media company rather than a technology company
It will further underline the power of social media—in Twitter’s case, short text messages of no more than 140 characters—as a tool for mass communications. It will mean that the all of the biggest social-media behemoths, including Facebook and LinkedIn, will have left the shadows of private ownership for the spotlight of the public markets. And it will add another dimension to the growing rivalry between America’s leading tech firms, who are increasingly invading one another’s strongholds. (economist)

As Twitter has evolved, particularly over the past couple of years, from a simple, text-based service toward something richer and fuller: users can now embed everything from pictures to Vines to full-on mini-apps within their tweets. It’s like a stream gradually becoming a raging river. Twitter has transitioned from a technology company into a powerful media company in its own right.

Underwriter
Morgan Stanley’s powerful tech team, which led the Facebook IPO, will not be the lead underwriter for the Twitter IPO. That role will be filled by Goldman Sachs. This is a big change in Silicon Valley, where Morgan Stanley has ruled the hottest tech IPOs in recent years, like the IPOs of Facebook, Groupon and Zynga, all three of these IPOs did not go well.

In conclusion
It’s not clear yet if Twitter has picked an exchange to list on, but another difference would be if the company chooses to move away from Nasdaq, which for years has been the exchange of choice for Silicon Valley. Nasdaq was widely criticized for its role in the botched Facebook IPO and Nasdaq paid a $10 million penalty to settle SEC allegations stemming from its “poor systems and decision making” during Facebook’s IPO.

The area of growth that would most likely garner user outrage after a Twitter IPO would be the addition of more obtrusive advertisements to the Twitter feed. But that is nothing new to Twitter, which already monetizes heavily through advertisements. (In line with the platform’s use as a second screen, Twitter even works with advertisers to help them target specific television audiences). Because Twitter already employs an ad strategy that relies heavily on mobile and targeted ads, it’s more likely a change in advertising would come around Twitter’s other features, not the Twitter feed. One part of the user experience that may change will be an influx of new features and partnerships, particularly around entertainment, television and ecommerce. Twitter recently hired former Ticketmaster president Nathan Hubbard to run commerce for the platform and bring shopping to the Twitter feed. The added transparency that comes with filing earnings documents each quarter will mean more features for users.

One thing is certain: Dick Costolo, Twitter’s CEO, won’t be showing up for the Wall Street road show in a hoodie.

Looking forward to your comments with your thoughts!

 

References used:

http://www.bloomberg.com/news/2013-09-13/goldman-sachs-scores-coup-winning-lead-position-on-twitter-ipo.html

http://finance.fortune.cnn.com/2013/09/12/twitter-ipo-plans/ 

http://blogs.wsj.com/digits/2013/09/13/what-people-are-saying-about-twitters-ipo/

http://www.forbes.com/sites/nathanvardi/2013/09/13/why-twitters-ipo-wont-be-like-facebooks-ipo/ 

http://qz.com/124005/inside-twitters-plan-to-go-public-as-quickly-and-quietly-as-it-can/

http://allthingsd.com/20130911/mark-zuckerberg-has-some-advice-for-twitters-ipo-dont-be-afraid/

Don’t blindly trust Big Data

The word ‘prediction’ triggers an uncomfortable feeling inside of me, since I read Nassim Nicholas Taleb’s book ‘The Black Swan – Impact of the Highly Improbable.’ The author demonstrates the astonishingly bad track record of human predictions and elaborates on philosophical, statistical and psychological issues that make it impossible for us to predict. McAffee and Brynjolfsson – [1], however, state in an article that was required for this course that ‘using big data leads to better predictions, and better predictions yield better decisions’. Now I would call this, two contradicting points of view.

Interestingly enough, Taleb recently wrote an article in Wired Magazin about the flaws of Big Data entitled ‘Beware the Big Errors of Big Data’ – [2]. His view is that Big Data gives us more information, but also more false information. Consequently, he argues, the sheer amount of data makes it easy to find statistically significant relationships between variables. We humans like the simplicity of thinking that a certain effect has one or at least a few understandable causes – a phenomenon Taleb calls Narrative Bias. To bring this blog back in line with our course, let’s consider the example of taking twitter activities as the bases for prediction of stock markets, as mentioned in Luo et al.’s article -[3]. The article states that twitter activities are ‘significant leading indicators of firm equity’. Just like the student 322165pk before me, I doubt this relationship. People are self-aggrandizing and therefore not honest on twitter. To base predictions on this sort of data seems careless. Nevertheless, my key concern is not the quality of the collected data but Big Data itself, which sources from twitter etc..  Big D. makes it virtually impossible not to find relationships like the ‘twitter predicts stock market’. The researcher can easily fall for a confirmation bias, so a quest to search for information to confirm their own point of view, whilst disregarding contrary or opposing data.

To visualize this point, please have look at the following: The graph shows that the more variables and information we have the more false correlation we will obtain.

bigdatabigerrors_taleb

Obviously, as a BIM student I would like to know why I should learn about Big Data, if I am that doubtful about its predictive abilities. Big Data can show how people use your products in ways that you have not expected, for example, services like tumblr started out with a focus on erotica and later the makers discovered that their site was mainly used for other, less wicked purposes. Generally speaking it can serve as a tool for self-measurement, as Mouton [4] puts it, and tell us the things we do not know instead of confirming the things that we would like to know.

I hope I could spark some interest about the author and his books ‘Black Swan’, ‘Fooled by Randomness’ and the freshly released ‘Antifragility’. If you are interested then you should join me to Amsterdam on the 4th of October, as Nassim Taleb is holding a lecture in the Pathé Tuschinkski. [https://www.nexus-instituut.nl/en/events/137-nassim-nicholas-taleb] Get your tickets!

Nils

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[1] McAfee, A., and Brynjolfsson, E. 2012. Big Data: The Management Revolution. Harvard Business Review 90(10) 60-68.

[2] http://www.wired.com/opinion/2013/02/big-data-means-big-errors-people/

[3] Luo, X., Jie, Z., and Duan, W. 2013. Social Media and Firm Equity Value. Information Systems Research 24(1) 146-163.

[4] http://www.minyanville.com/sectors/technology/articles/Does-Big-Data-Have-Us-2527Fooled/8/19/2013/id/51346?refresh=1

http://www.fiercebigdata.com/story/big-data-predictions-fooled-randomness-and-subject-tmi/2013-08-21