It has been more than a year since Facebook went public, however, the social media industry has once again gained the attention of the commercial world as Twitter releases its internal assessment of its potential share price in preparation for its initial public offering. Even though, Twitter has shown incredible growth, its revenue grew ten fold to $317 millions between 2010 and 2013, its commercial prospect remains uncertain. On one hand Twitter is still not profiting, it lost “$69 million dollars in the first six months of 2013” but it has also been shown that Twitter has strong growth potential in international market. However, good prospects do not equate to financial success, for instance the hyped online coupon business, Groupon and social gaming company, Zynga shown prominent potential but they both failed to generate sufficient revenue. Their inabilities to transform their potential into solid earning are reflected in their stock prices which have fallen to a fraction of their initial listing price. Overall Twitter’s situation is not unique as it has been shown that social media as an industry is quite volatile.

Reference:

http://www.economist.com/blogs/schumpeter/2013/10/twitters-ipo

 Picture Reference:

http://news.cnet.com/8301-1023_3-57605984-93/twitters-ipo-filing-6-surprises/