A recent article in Wired suggested that Twitters impending IPO will destroy the quality of the service as it tries to maximise its ad revenue and satiate its new shareholders. Twitter will need to provide advertising methodologies in order to raise revenues across the microblogging service.
The quote from Wired:
But once it goes public, Twitter will have no choice but to strive to maximize shareholder returns, which would appear to create a Catch-22. More ads on Twitter means more money for Twitter, which makes shareholders happy. But more ads on Twitter will make users less happy, which means fewer users. Fewer users mean lower ad rates, which makes shareholders unhappy — a vicious cycle.
We disagree – having the the additional capital resulting from the public IPO will enable Twitter to find new ways to innovate on its platform and provide a more more compelling service. Obviously the dumb money would continue to roll out in the same way it always has. Look at Google, when it floated it just had the one product: search. Now Twitter can use some of its DNA to innovate in the social network and social space. So Wired we think you don’t know what you’re talking about – the Twitter IPO will be the making of the service.
See the article here: http://www.wired.com/business/2013/09/killer-ipo-could-kill-twitter