How to Monetize a Revolution

A heat map of tweets related to Ukraine in February. Source: @twitterdata.

Government upheavals seem to be in vogue, and beyond the tragic human and psychological tolls, such political instability typically means scared investors and hurt profits. It is, after all, tough to trade goods, services, and stocks when your life may be at stake. This is one reason why Turkey's stock market and the correlating iShares MSCI Turkey Fund (NYSEMKT: TUR  ) have fallen 25% over the past six months.

Even so, there are businesses that benefit from conflict. Your mind may jump to the defense companies that build the physical weapons. Or you may take a more optimistic view and think of the companies involved in postwar reconstruction -- those that rebuild the physical infrastructure. What might be forgotten are those that deal in the more abstract psychological weapons and the less tangible digital infrastructures.

These new beneficiaries of conflict are the Internet companies that enable the masses to communicate despite restrictive laws and regulations. Inherent in these companies' technology is broad and fast relaying of information. And for governments that might have something to hide, and might have a problem controlling this information, this technology represents an obstacle in maintaining control.

While traditional media, commonly called the Fourth Estate, used to help keep corruption and poor governance in check, Craigslist and other Internet innovations stole the revenue on which this old media relied. However, the Internet gave rise to new powers, such as Twitter  (NYSE: TWTR  ) , Facebook  (NASDAQ: FB  ) , and Google's (NASDAQ: GOOGL  ) YouTube, that allow any user to call out a politician's malfeasance. These services are the new Fourth Estate, and while the benefits of this role are difficult to quantify, it's one reason to back these companies and consider them as investments.

In Turkey, Prime Minister Recep Tayyip Erdogan attempted to shut down citizens' access to Twitter last week, saying, "We will wipe out all of these. ... Everyone will see how powerful the Republic of Turkey is." Erdogan and other Turkish politicians are upset because of a couple of Twitter users who are publishing damaging material. According to Bloomberg:

Almost every day they publish new material, mostly from alleged wiretappings of conversations. The leaks call into question everything from the financial probity of ministers to their religious piety, and provide evidence of a media browbeaten by the government. Ministers say the recordings are assembled by montage.

Twitter responded with one way around the ban:

After the ban, the number of  tweets increased 138% and set a record for Twitter use in the country.

This type of publicity would be impossible to buy; not only is it free marketing, but it also engenders incredible goodwill with those championing free speech. And this isn't limited to Turkey or Twitter.

Facebook gained users at an increased clip in the Middle East in the first three months of 2011 during the Arab Spring:

Country Facebook user growth, Jan-Mar
   2011  2010
Bahrain  15%  6%
Egypt  29%  12%
Tunisia  17%  10%

Source: Arab Social Media Report.

Egyptians mark the first anniversary of the uprising in Tahrir Square, taken Jan. 25, 2014, by Flickr user Gigi Ibrahim

Facebook's Syrian and Yemen user bases grew 23% between January and May 2013. Both of these countries, of course, have experienced tumultuous politics.

The Arab region is a surprising No. 2 in terms of number of YouTube videos watched. But the emotional appeal of the visual medium is universal. Anyone in the world can view what has happened during recent protests in Venezuela and elsewhere. And anyone can create such a video, such as the 21-year-old Venezuelan-American student whose video, made in a day and posted in the middle of February, already has 4 million views across English and Spanish versions.

Protests in Venezeula on Feb. 15, 2014, captured by Twitter user @andresAzp.

An irreplaceable part of society
These services are cementing themselves as the new Fourth Estate. With that designation they become more than a business, but rather a necessary part of society which almost guarantees that they stick around. An entire generation is using these services to achieve reform, and the brand recognition associated with greater freedom will ring and resonate far into the future.

These companies have grateful and solid user bases. Now if only they could sell more ads.

A few other forever stock ideas
Social media may not have been the first sector you thought of as a stable investment. There are a few other companies you may never have thought of as fantastic long-term investments. That's why our CEO, legendary investor Tom Gardner, has permitted us to reveal The Motley Fool's 3 Stocks to Own Forever. These picks are free today! Just click here now to uncover the three companies we love. 

Read/Post Comments (1) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 25, 2014, at 1:26 PM, Biloxi8 wrote:

    Monetize a Revolution? Revolution is about throwing out the old and welcoming the new.

    You can start by cutting up your credit cards, deleting your social media accounts!

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2887116, ~/Articles/ArticleHandler.aspx, 8/31/2015 11:31:38 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Dan Newman

Writing for the Fool since 2011. Interested in technology, the future of society, and how both overlap.

Today's Market

updated Moments ago Sponsored by:
DOW 16,536.88 -106.13 -0.64%
S&P 500 1,976.02 -12.85 -0.65%
NASD 4,803.05 -25.27 -0.52%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/31/2015 11:15 AM
FB $90.25 Down -0.76 -0.84%
Facebook CAPS Rating: ***
GOOGL $663.61 Up +3.92 +0.59%
Google (A shares) CAPS Rating: ****
TUR $38.22 Up +0.44 +1.16%
Turkey Investment… CAPS Rating: ****
TWTR $27.63 Up +0.80 +2.98%
Twitter CAPS Rating: ***