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Thursday, July 26, 2012

NYT: Is Twitter a Media or Technology Company? | Small Retailers Open Up Storefronts on Facebook Pages

July 25, 2012, 10:02 am

Is Twitter a Media or Technology Company?

illustration by Nick Bilton/The New York Times
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If it looks like a duck, quacks like a duck and walks like a duck, then it’s a duck — right?
One question many seem to be wondering about Twitter: is this duck a media or technology company?
In a meeting at The New York Times offices in New York, Dick Costolo, the chief executive officer of Twitter, said that Twitter is some variation of both. “I think of the company as a technology company that is in the media business,” Mr. Costolo told a room full of editors and reporters. “Our business is an advertising business, we don’t sell technology.”
Mr. Costolo said the company does not have any reporters or a newsroom, and almost half of its 1,300 employees are engineers, focused on building the technology that runs Twitter and inventing new features for the service.
It is certain that the Twitter bird is evolving into something different than it once was. Lately, the company has been experimenting with media-like products.
Last month Twitter announced a one-stop shop for Nascar fans that corralled Twitter messages from drivers and teams at the Pocono 400 race. The Nascar-branded page that Twitter highlighted in television ads was incredibly visceral, with pictures from inside driver’s cars. Fans could practically smell the fuel from the pit.
Earlier this week Twitter continued this media experiment, announcing a Twitter-branded destination page for the Olympics.
The company’s metamorphosis can also be seen in the way it is restructuring how it works with developers who build products and tools on the Twitter platform using the company’s application programming interface, or A.P.I.
Mr. Costolo said he wanted to migrate away from developers building more external Twitter apps, to a world where developers and companies are building products inside the Twitter platform — a move, he argued, that would create a better experience for users.
“I think of us as a technology company because I think the future of the company is in building on an extensible platform that allows third-party developers and companies to add value to Twitter in a way that is accretive to Twitter and is accretive to our users,” Mr. Costolo said. “I don’t need to be or want to be in the content business.”
Instead of competing in the content business, Twitter is trying to train influential creators to use the service more effectively. For example, Mr. Costolo said, there are Twitter employees who work with celebrities, politicians, athletes and media outlets to hone the best use of the service. “We call them V.I.T.’s internally, Very Important Tweeters. It’s cute; we’re all about being adorable and cute,” he said.
With all of this content from V.I.T.’s and media companies, Twitter has grown as a burgeoning destination for advertisers.
Mr. Costolo noted that, over all, “the engagement rates on ads are great.” Promoted Tweets are seeing greater “percentage points of engagement” compared with traditional Web advertisements that are often only clicked at a rate of a fraction of a percent. Mobile ads are a perfect betrothal as people engage with Twitter more on mobile phones than the desktop, he said.
Yet even with the introduction of ads and content-branded Twitter destinations, Mr. Costolo still sees the company as a communication platform above all else.
“Our vision for the company is simple: Twitter brings you closer,” Mr. Costolo said in conclusion. ”You can say something now and broadcast and everyone around the world sees it immediately.”
Which sure sounds just like a media company to me.


Small-Business Guide

Small Retailers Open Up Storefronts on Facebook Pages

John W. Adkisson for The New York Times
Darren Gann of the Baby Grocery Store has a kiosk at a mall in Charlotte, N.C., as well as a presence on Facebook.

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When Mandie Miller left her job as an on-air traffic reporter in Charlotte, N.C., to have her first child, she started baking cakes for friends, just for fun. The response was so positive that in April 2009 she started a business, Got What It Cakes.
You're the Boss Blog

Have You Tried Selling Goods on Facebook?

More small businesses are finding there are advantages to setting up shop mostly or even entirely on Facebook, but there are also risks.
    Quick Tips:
    Remember that you do not own your Facebook page; Facebook does.
    Facebook pages can look generic; find ways to differentiate yours.

    Look for creative ways to build relationships with your customers.
    Suggested Resources:
    Payvment calls itself the No. 1 social commerce platform.
    The N.F.I.B. has a guide for businesses using a Facebook timeline.
Ms. Miller put up a Web site, but about five months later her sister created a Got What It Cakes Facebook page. That’s when the business started to grow. Cake orders went from two or three a weekend to six to 10; now Ms. Miller is turning away another 10 each weekend. Annual revenue at the end of her second year in business was a little more than $40,000.
Got What It Cakes is part of a new wave of online commerce: F-commerce. Social media specialists say the term was coined in 2009 to describe the growing number of businesses that sell through a Facebook page. Payvment, a start-up that provides support for Facebook shopping transactions, says it has 170,000 clients and is signing on about 1,500 stores a week, most with fewer than five employees.
The rise of F-commerce has been largely haphazard, something Facebook did not instigate or promote. A spokesman declined to discuss the phenomenon, except to acknowledge, “Retailers are experimenting in a number of ways.”
Small businesses seem to be having more success on Facebook than large companies, said Sucharita Mulpuru, a retail analyst at Forrester. Those doing well, she said, generally have less than $100,000 in revenue and fewer than 10 employees. Gap, Nordstrom, J. C. Penney and GameStop, on the other hand, have all shut down Facebook stores in the last 12 months, mostly, Ms. Mulpuru said, because consumers are accustomed to the richer experience on retailing Web sites.
But Facebook can present challenges to businesses of all sizes. Some consumers do not feel safe buying directly from a Facebook storefront, said Krista Garcia, a social commerce analyst with a market research firm, eMarketer. And business owners should be aware that they do not own their Facebook pages — Facebook does, and it can change the appearance and rules whenever it wants.
GETTING STARTED It’s easy for a small business to open a Facebook storefront by creating a page in the business’s name, loading photos of the product and adding shopping functions. Because Facebook storefronts can look generic, small businesses have to find ways to differentiate themselves, said Jay Bean, chief executive of an online marketing firm, OrangeSoda.
Customizing a page is done by installing applications that enable customers to do things like shop, enter contests or see a menu. Apps are available from Facebook and outside vendors, or they can be custom-developed.
Payvment’s tools let businesses create a storefront with a shopping cart and promotions like discounts and coupons.
USE YOUR PERSONALITY Unlike larger businesses, small businesses can build on their personal relationships to end users, said Wendy Tan-White, chief executive of Moonfruit, which builds and supports e-commerce Web sites. She advises using a cover image for a business’s page that relates not only to the product or service but to customers, too.
On the Got What It Cakes storefront, for example, the cover photo shows the owner, Ms. Miller, in her home, with baby photos on the wall behind her and several cakes scattered about the sitting room; the smaller-profile photo is the company logo.
Many of Ms. Miller’s customers are busy mothers like her, and she communicates frequently with them on Facebook. “I am a local, one-person business but I have 5,000 fans,” she said.
Ms. Miller gives the kinds of tips her customers might get from a friend, like what to do with leftover chocolate cake batter: “Put some butter on your griddle and make pancakes with it.”
POST, PIN AND TAG To attract fans and friends, a storefront needs to be dynamic, with frequent posts — status updates and photos. Tagging people in a photo may cause the photo to show up on the tagged person’s page, where friends (and often friends’ friends) can see it.
Deann Kump, founder of TuTu Cute, which sells hair accessories and clothing for mothers, babies and toddlers, hosts a monthly photo contest on her page.
“If someone posts a photo of their daughter wearing one of my products and tags it, their friends will wonder, ‘What is TuTu Cute?’ and go to my page,” she said.
Mrs. Kump opened on Facebook last December and about half of her sales occur on the site.
Ms. Tan-White of Moonfruit suggested that a business give customers incentives to spread the word, offering a discount if they tag its product in a photo. Facebook’s “pin” feature allows users to pin a post, which might be a product of the week or a special discount and pushes the post to the top of a business’s page.
FOCUS ON COMMUNITY Magical Moments Modeling made TuTu Cute a “boutique of the month” on its Facebook page in April so friends of both pages could see it. And Mrs. Kump often promotes the work of children’s photographers she likes; they in turn promote her accessories.
Patrick Skoff, a painter who sells 90 percent of his paintings on Facebook, said some visitors to his page might have been hesitant about buying until they saw the comments and “likes” on new and sold paintings.
“They see all the likes and think, ‘Oh, I better buy that before someone else does,’ ” Mr. Skoff said.
In July he painted 10 paintings a day for 10 days and sold all of them through Facebook.
Darren Gann, co-owner of the Baby Grocery Store, started his Facebook storefront in February (he also has a kiosk in SouthPark Mall in Charlotte). Thirty-five percent of his sales come through Facebook, and Mr. Gann gives lots of help and advice to his customers. “They communicate with us there about everything, from asking about a shipment to what do we recommend for a gluten-free 9-month-old."
Heather Logrippo opened a Facebook storefront in 2009 for We’ve Labels, which sells clothing labels. She routinely goes to the Facebook pages where her customers spend time, like those for quilters or knitters.
“I log on as We’ve Labels and start interacting with people, writing things like: ‘That’s a beautiful scarf you’ve knitted,’ ” she said. Those knitters and quilters will often click on the We’ve Labels page out of curiosity.
OFFER OPTIONS While some small businesses sell only through Facebook, others maintain separate Web sites or have bricks-and-mortar outlets, because not all consumers feel comfortable using their credit card information on the site.
Ashley Gall, owner of Méli Jewelry, which sells jewelry she designs and makes, said buying on Facebook was still too new for many of her customers — 15 percent of her sales happen there — so she also sells on Etsy, Indie Fashion Marketplace and her own Web site.
Most of Mandie Miller’s customers order on Facebook and pay when she delivers the cake or when they pick it up. Yet she still maintains a Web site of her own.
“I do a lot of wedding cakes, and it’s the moms and dads of brides usually paying and they often want to go to a regular business Web site. I also have grandmothers in their 80s and 90s that come to my cake tastings,” she said. “They aren’t on Facebook.”

This article has been revised to reflect the following correction:
Correction: July 25, 2012

An earlier version of this article referred imprecisely to recent changes that Facebook made to its site to allow more than one-time payments by letting customers store credit card information on the site. Those changes apply to virtual goods, not real products.

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