Happy Birthday Twitter (NYSE:TWTR)! The social networking and microblogging site turned eight on Friday, but this company is showing no signs of aging. In fact, Twitter appears ready to post a profit soon.
From selfies to the Twitterati, Twitter has changed the way many people get news and share it with the world. Let's take a closer look at what we've learned from Twitter's rapid ascent from a basic microblogging platform to an international social network with more than 938 million registered users.
What have we learned from Twitter?
Never underestimate the power of 140 characters. There's a lot that a person can do with 140 characters, and Twitter has proven this time and again. Twitter has faced its fair share of controversy over the last eight years, but has watched sales rise significantly as its user base has grown.
In the fourth quarter of 2013, Twitter sales rose 116% to $243 million, and website officials expect sales between $230 million-$240 million in the first three months of this year. If more people sign up for Twitter, the company could boost sales and move closer to posting its first-ever profit.
Marketers can make the most of their ads with Twitter, as the company has transformed how marketers reach target audiences. Now more than ever before, companies of all sizes are using Twitter to promote their brands, products, and services, a trend that's likely to continue into the foreseeable future.
Twitter has helped many businesses launch localized campaigns, including Arizona-based Dunkin' Brands Group (NASDAQ:DNKN) franchisee First Cup. Recently, First Cup was able to convince more than 2,000 consumers to take advantage of its free coffee offer by searching for relevant hashtags and responding to Twitter conversations related to its coffee products.
First Cup's marketing strategy illustrates just one of the many ways that marketers can use Twitter to interact with prospects and clients. As more companies consider innovative marketing strategies to connect with target audiences, Twitter can help. Meanwhile, Twitter will grow as its user base expands, which could help this company's sales (and, eventually, its profits) increase.
Of course, there's more than just one major social networking platform. In February 2004, Mark Zuckerberg launched Facebook (NASDAQ:FB), and simultaneously gave millions of people around the globe a new reason to share photos, connect with past acquaintances, and much more. When Twitter was unveiled two years later, however, it proved to be a major competitor to Facebook.
While many people use both Facebook and Twitter, each social network has its own unique advantages. Facebook has grown into a multimedia platform, and people use it for everything from advertising to gaming. Also, Facebook continues to explore new ways to grow its brand. In fact, Facebook's ad revenue increased 76% in the most recent quarter year-over-year. The versatility of Facebook's platform makes it appealing to users of all ages and gives it a major competitive advantage.
Twitter's growth, however, comes from its simplicity. For many people, Twitter is the go-to source for breaking news, which gives users the ability to stay up to date in real-time. The microblogging site enables users to send and receive news updates, photos, and videos in seconds, and its simplicity is a major selling point for celebrities, marketers, and the general public.
The bottom line
If the next eight years are anything like the last eight for Twitter, its stock could be consistently profitable by the time the company reaches its sweet 16. Twitter's user base is unlikely to grow at the same rates it has in the past, but the microblogging site will continue to be a major draw for marketers, which will help improve its sales. In addition, Twitter could expand as new smartphones, smart watches, and tablets become available, making it easier for people to share instant news updates with family and friends around the world.
Daniel Kobialka has no position in any stocks mentioned. The Motley Fool recommends Facebook and Twitter. The Motley Fool owns shares of Facebook. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.