- The Washington Times - Monday, April 13, 2009

Twitter Inc., the online messaging service derided by comedian Jon Stewart as “inane chatter,” is being taken seriously by big business.

Dell Inc. is using Twitter to sell personal computers and solve customer problems. International Business Machines Corp. uses it to get research scientists talking. Intel Corp. is there looking for engineers, and Microsoft Corp. is sponsoring a Twitter site that carries “Tweets” from executives.

Corporate fascination with Twitter, a blend of instant messaging and blogging known as “micro-blogging,” is intensifying as companies seek new ways to reach consumers in the recession. Twitter users post 140-character “Tweets” about whatever is on their mind, giving companies a unique opportunity to pounce on consumers right as they express an interest in buying something, said analyst Charlene Li.

“It’s the ability to tap into somebody’s interest at the moment it’s expressed,” said Ms. Li, founder of Altimeter Group, a San Mateo, Calif.-based research firm that specializes in social technology.

Twitter users in the United States increased 15-fold to 7 million in February from a year ago, according to Nielsen Online.

Companies can use Tweets to get an instantaneous snapshot of what people are saying about their products, or reach consumers who are just about to buy, say, a Dell computer.

Twitter may also be a solution for reaching users who are increasingly immune to traditional advertising. About 24 percent of 123 businesses surveyed by Forrester Research Inc. are planning to cut traditional ad budgets to boost social-media spending this year.

“More and more, people are becoming aware of the different ways companies can use Twitter,” Twitter Chief Executive Officer Evan Williams, 37, said in an e-mail. “And as the user base has grown, the value to doing so has grown.”

In October, Mr. Williams said in an interview that Twitter expected to start making revenue in 2009, probably through advertising. Twitter doesn’t disclose its sales.

Twitter users post messages about music, brands of coffee, the sex lives of their pets, anything and everything. Twitterers direct their musings at groups of users who decide to “follow” them on the site. Much of the content takes the form of “life streams,” or short descriptions throughout the day of what a particular user is doing or thinking. It’s those random, often frivolous postings that have attracted ridicule from comedians such as Mr. Stewart, host of Comedy Central’s “The Daily Show.”

“Thank jesums for coffee,music,small fluffy creatures,sharks,aliens,spandex,big sunglasses,NARS turkish delight lipgloss,and perez hilton,” a user called DanaLaurenJazz Tweeted recently.

Twitter is more than a forum for random thoughts, said Todd Chaffee, a partner at Institutional Venture Partners, which invested $14 million in Twitter in February. In total, Twitter has received more than $50 million in venture funding since it was started in 2006 by Mr. Williams and co-founder Biz Stone. Facebook, by contrast, has raised about $500 million from debt and equity, including a $240 million investment from Microsoft that valued the company at $15 billion.

“The conventional wisdom is that it’s just a conversation place,” Mr. Chaffee said. “The real story is it’s a utility to be used in different ways.”

While micro-blogging sites are growing in popularity, Twitter faces the challenge that its technology could be reproduced. Facebook and sites such as LinkedIn Corp. offer similar micro-blogging features.

“I don’t know how persistent Twitter will be,” said Sharon Wienbar, a partner at Foster City, Calif.-based Scale Venture Partners, which invests in Internet companies. “What’s achieved in Twitter can be achieved in a lot of other form factors.”

Dell, the world’s second-largest personal-computer maker, started using Twitter after an employee attended the South by Southwest technology festival in Austin, Texas. Dell’s outlet unit, which sells reconditioned, returned and slightly damaged machines, Tweets to reach new customers.

“Dell Outlet doesn’t have a lot of marketing dollars,” spokesman Richard Binhammer said. “It occurred to them that they might be able to move their inventory quicker by offering deals on Twitter.”

Dell has landed $1 million of sales using Twitter. Even though that’s a fraction of Dell’s $61 billion in annual sales, it costs almost nothing, Mr. Binhammer said. Twitter also allows Dell to promote new products and help customers with technical problems, he said.

Intel, the world’s largest semiconductor maker, has used Twitter to advertise engineering positions and publicize events including the company’s developer forums.

And then there are companies just getting a start, such as Yield Software Inc.

“It’s just absolutely critical to our business strategy,” said Derek Gordon, vice president at San Mateo, Calif.-based Yield. “When I started out in PR, it was all about mass communication. Now it’s very much one-to-one. It’s this intimate connection with people you seek to serve.”

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