Privacy Issues and Monetizing Twitter

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Weekly Case Note 5: Privacy Issues and Monetizing Twitter Background This case looks at Twitter in early 2010. At this point, Twitter had a market valuation of $1 billion, but was a free service without a viable business plan. The challenge facing Twitter at this point in time is finding a balance between Twitter’s revenue generating initiatives and protecting the the privacy rights of the tens of millions of people using the service. Issues The founders of Twitter were contemplating whether they could monetize their business model while concurrently respecting their legal and ethical obligations to their users, and if so how should it be done? The Five Forces Model Since Twitter wants to generate revenue, first of all, it needs to evaluate its Business Segment. For this, Porter's 5 Forces Model can be applied: 1) Rivalry among existing competitors (high: Facebook, Google) 2) Buyer Power (high: users of Twitter can easily switch if they feel that their privacy is violated) 3) Supplier Power (low: I don't see any real supplier for Twitter) 4) Threat of substitute (low: SMS, MMS, Emails and so on) 5) Threat of new entrants (high: anyone with good computer knowledge can create a social network) Alternatives Here is a brief list on the alternatives I think Twitter should take into consideration 1. Sponsored/Promoted tweets, 2. Sales of analytic tools and services to advertisers, 3. Sales of information to other data-collecting companies Recommendations There are two recommendations that can generate revenue for twitter and will also cater the issues Twitter is facing. The first recommendation is to collaborate with research firms and sell the information of users and help them gain some productive results from the information provided. Users’ concerns over the privacy issue can also be tackled by gaining their trust and permission before

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