The birth of Twitter as a publicly-traded company — an event that is expected to occur on Thursday, when its shares are listed and start trading on the New York Stock Exchange — is the culmination of a long journey that began seven years ago in San Francisco, under somewhat chaotic circumstances. In a sense, the Twitter IPO is a lot more like graduation day than it is a birth: going public is a sign that that the real-time information network has left the startup world behind and has become a significant global media entity in its own right.
Getting to the point where it can do a public offering has also required the company to transform the service in some fundamental ways, however — and it’s not clear what the long-term effects of those changes will be.
The IPO — which some market watchers say has garnered so much institutional interest on Wall Street that the offering closed its books early, according to a report from Reuters — could give Twitter a market value of $15 billion or more, based on estimates of the price range the shares are expected to go public at. Coming on the heels of Facebook’s somewhat troubled IPO, Twitter’s offering is also expected to help breathe new life into the market for technology offerings.
Can Twitter grow without changing its nature?
One of the big unanswered questions, however, is what this graduation from struggling startup to publicly-traded behemoth means for Twitter itself, and for users. The company will be flush with cash once it finishes the process — which could raise as much as $2 billion, or more than Google raised when it first went public in 2004. And what will it do with all that money? Continue its global expansion, most likely, as well as building even more tools that can help it achieve the same kind of ubiquitous status as Facebook.
We’ve already seen indications of what that might look like over the last year or two, as Twitter has made the changes necessary to prove to its financial backers that it is worth the more than $1 billion in venture capital they have pumped into the company — changes that not everyone is excited about, including full-sized images and video previews that now appear by default.
In many ways, Twitter’s IPO is as much an end as it is a beginning: the end of a long process that has taken it from being a crash-prone and somewhat unfocused tool for real-time sharing of information about everything from revolutions to earthquakes, and turned it into a media entity that has formed cozy relationships with some of the world’s major broadcasters — including NBC and the BBC — and a platform that rivals Facebook as a way of driving audiences towards content. When it graduates, in other words, Twitter is clearly looking for a job in TV.
But TV ads and video clips of sporting events aren’t what created the value that Twitter is now busy monetizing. Arguably, the network’s ability to give a voice to the voiceless — whether in Egypt’s Tahrir Square or in Turkey or Iran — and to allow news about global events to flow in ways that traditional media companies never imagined is what created much of that value, and helped to make Twitter the influential media entity it is now. So what happens to being the “free-speech wing of the free-speech party” when advertising becomes paramount?
Twitter has to go where the money is
Twitter has taken the course it has because television and TV partnerships are where the money is — money that comes not just from broadcasters, but from the advertisers who want to reach the audiences those broadcasters can attract. Whether this is an arrangement that ultimately benefits both users and Twitter itself remains to be seen, but there’s no question that as a public company it is going to have to pursue that goal even more aggressively, in order to generate the kinds of returns investors are looking for.
The company may have managed to transform the original, innocuous-looking, text-based service into something that is more visually oriented, and therefore of more interest to media companies and advertisers. But as more than one frustrated user has pointed out, it has also become much more like Facebook in the process, an evolution that not everyone sees as positive. Is that going to ultimately attract more users than it repels? That’s the bet Twitter is making.
Eventually, everyone has to leave the comfort of college or university — or the comfort of being a small startup with few expectations placed on it — and make their way in the world, and doing that often requires that compromises be made. But can Twitter manage to get a job and put food on the table for its growing family without losing its soul in the process?
Post and thumbnail photos courtesy of Shutterstock / Luis Louro