SOCIAL MEDIA / FEB. 07, 2014
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Is Twitter All It’s Cracked Up to Be?

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Twitter is probably the most famous social media site in the world at the moment.  Not only is it used by private individuals, but also nearly every business and celebrity uses it for PR and advertising. Given its popularity and recent flotation on the stock market it is viewed by many as the king of social media sites. But Is Twitter really all it’s cracked up to be?

Twitter Makes you Stupid

According to research conducted by the University of Edinburgh and Masdar Institute of Science and Technology; Twitter and social media sites in general, make people stupid. The study found that use of social media, reduces people ability to think analytically and problem solve. With large communities such as Twitter, people have the perception that there is someone else to help them or answer questions for them. Essentially, it has made people lazy because they think that they can just always ask a friend if they get stuck. In order to prove this Dr Iyah Rahwan asked participants who used social media, three trick questions numerous times. Even though they were asked the same questions over and over again, most of the participants only got the questions right when they were in a group. Basically, the participants only got the answers right when they were able to copy from each other. The participants were rushing into the questions and giving the intuitive answer, rather than the correct answer. They were not being analytical and reasoning out the answers logically in their heads.

Twitter Isn’t Making a Profit

Despite Twitter being floated on the stock market in November with a valuation of $18 billion, the company is still not making a profit. While its user base is still growing and has 241 million monthly users, its growth rate has slowed by 10% to 3.8%. Most troubling of all, is probably that the company has reported a net loss of $645 million for 2013. This caused a share price drop of 12%, but revenues have still risen by 110% to $665 Million. Whatever the increase in their revenues they are still making a loss and many question whether they will ever start making a profit. As Nate Elliot of research firm Forrester said, "If you don’t have an engaged user base, you don’t have a business. They have got to do better on users, that is the entire story." Given that most of their revenue comes from advertising, keeping a loyal and growing user base is vital, if the company ever hopes to make a profit.

So if you are yearning to get on board with the Twitter craze, this may actually be the beginning of the end for the king of Microblogging sites. If on the other hand you are thinking of investing in Twitter because it is hip; precious metals might be a better option, they rarely lose their value completely. Twitter, however, makes you stupid and has still not made a profit. It doesn’t seem like a particularly good investment and certainly is not all it’s cracked up to be.

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