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Case Study Analysis: Privacy Issues and Monetizing Twitter

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Case Study Analysis: Privacy Issues and Monetizing Twitter

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  • Feb. 10, 2013
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Case Study Analysis: Privacy Issues and Monetizing Twitter
Problem Statement
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 privacy rights of the tens of millions using Twitter’s popular social networking service. Twitter was founded in 2006 by Jack Dorsey, Evan Williams, and Biz Stones. All three individuals held executive level positions at the time of the case study. Twitter created a relatively simple, but very popular social network consisting of short messages of 140 characters or less called “tweets”. Users could tweet using a variety of technologies ranging from the Twitter website to cell phone text messages and third party applications for mobile devices. From its inception in 2006, Twitter’s user base grew quickly. While Twitter recorded an average of 500,000 tweets per quarter in 2007, that grew to four billion tweets in the first quarter of 2010. The largest group of users was the 25-34 age group Twitter became a popular way for celebrities to keep in touch with their fans, and was even used by NASA astronauts to provide updates on shuttle repairs. Twitter’s potential business applications seemed promising. Dell started using Twitter and within 3 years was generating $6 million in sales from the channel. Privacy concerns for users of various social media sites were a sensitive issue. Some users of Twitter, along with competitors such as Facebook, Google Buzz, and MySpace were concerned with how secure the personal data being provided to the social sites was. Also concerning was how a social media site may chose to sell user’s personal information for a profit to third parties. Most social media sites, Twitter included, had experienced negative publicity as a result of security breaches...