Note: If anyone is aware of any funding rounds not included below, have specific information on any of the assumptions made or can spot flaws in my calculations please feel free to highlight them in the comments.

First round – July 2007

This is the trickiest element as I don’t think terms of this deal were ever disclosed. Techcrunch reported at the time an estimate of $1-$5m of funding raised. It was later reported that the deal size was net funding after costs of $4.8m. The unknown factor though is what level of equity Union Square Ventures (the first VC) received in return for this investment.

In the absence of any firm figure for this dilution we need to make an estimate. This was obviously a pretty early stage investment at a relatively significant ($5m) level so one could expect the dilution to be fairly significant. We also know from the Second Round (see below) that almost a year later Twitter was valued pre investment at $80m. So balancing these factors lets assume a pre investment valuation for the first round of $20m which would mean that ownership post First Round would have been:

Founders – 80 per cent
VC – 20 per cent

This estimate is highly material to the rest of the calculations as it sets the initial level of founder ownership that all other rounds will then dilute. In the conclusion below I indicate the impact of different assumptions for this round to the current level of ownership.

Second Round – May 2008

Investment size was reported this time at $15m with a pre investment valuation of $80m. Post investment this gives revised ownership of:

Founders – 67.4 per cent
First Round VC – 16.8 per cent
Second Round VC – 15.8 per cent

Third Round – February 2009

Investment reported at $35m with a valuation of $250m though it is not clear if this is pre or post investment. If we assume pre this gives the following ownership post investment:

Founders – 59.1 per cent
First Round VC – 14.8 per cent
Second Round VCs – 13.9 per cent
Third Round VCs – 12.3 per cent

Fourth Round – September 2009

Investment size reported at $100m with a valuation of $1bn. Again not stated whether pre or post so lets assume pre gives the following ownership post investment:

Founders – 53.7 per cent
First Round VC – 13.4 per cent
Second Round VCs – 12.6 per cent
Third Round VCs – 11.2 per cent
Fourth Round VCs – 9.1 per cent

Fifth and latest round – December 2010

Investment reported at $200m at a valuation of $3.7bn. Again not stated whether pre or post so lets assume pre gives the following current ownership estimate:

Founders – 51.0 per cent
First Round VC – 12.7 per cent
Second Round VCs – 11.9 per cent
Third Round VCs – 10.6 per cent
Fourth Round VCs – 8.6 per cent
Fifth Round VCs – 5.1 per cent

Conclusion

This analysis would estimate the Twitter Founders ownership at 51 per cent with a valuation approaching $2bn.

If you vary the First round dilution assumption you get the following alternative estimates for the current level:

NB It is also worth noting that if the valuations for rounds 3, 4 and 5 were all post investment valuations this would lead to an additional dilution in all the ownership percentage figures of approximately 3.25 per cent i.e. 51 per cent would fall to 49 per cent. The valuation figures would also all fall by approximately 8 per cent as the post investment current valuation would be $3.7bn not $3.9bn ($3.7bn valuation + $200m investment).

Stephen Waddington highlighted this tool to me at the North East CIPR Awards on Friday (congrats to all the winners by the way).  It is pretty straightforward to use.  Put in a term, a url or hashtag and it calculates the following three measures:

Reach – the number of different people who follow people who have talked about the search in some way.

Exposure – how many times someone could have seen a particular reference to the topic e.g. if 4 people have tweeted it who all have a follower in common then that follower will have been exposed to it 4 times but will only count as 1 in the reach figures.

Impressions – the total number of occasions to see (effectively the sum of the “Exposure” figures for everyone “Reach”ed)

Note that the Reach figure measures the number of different people. Assuming this is the case (and I have no practical way of checking this) then this is good stuff as it ensures that duplication in networks is taken care of. It also tells you what proportion of the relevant tweets were retweets or @replies.

So a very good tool in theory for understanding the extent and likely penetration of a conversation. However unfortunately the bad news is that it is limited to the last 50 tweets, unless you pay TweetReach $20 and even then it is limited by Twitter’s API to the last seven days or 1,500 tweets. The seven day limitation also means that you MUST carry out the analysis close to the time of the relevant conversation as you can’t go back historically. These factors weaken its role as a measurement tool significantly unfortunately IMHO.

Perhaps now that Google are indexing our tweets the tool could be expanded?

This means traffic that has been referred to the urls directly and not from another online source. Now unless anyone is able to remember a url with 141 characters, which I am guessing is unlikely, then I assume all of these visits must have come from people visiting the post from emails that include a hyperlink.

The breakdown of unique visits and their sources is as follows:

Twitter also counts for almost a third of the visits, which isn’t surprising given that the post has been tweeted 128 times to date (thank you to everyone who RT’d).

But the fact that almost half of all visits were direct demonstrates the power that email still has as a tool for sharing information with your community. Glad we didn’t forget to mention it in our video (2:25) on how news spreads online

Apart from the obvious celebrity focus, Twitter’s success, in my view, is down to a number of factors, the three primary ones being:

- speed,
- permission;
- and relevance. 

It is these three characteristics that I see as being key to the further development of online communications in the future.

Speed 

When the Internet first appeared speed of communications was a key area everyone focussed on. We were all now “surfing the information superhighway”. No more relying on snail mail or faxes, a message could be sent by email or online messenger within minutes. With the advent of blogs and low cost publishing platforms this ability to communicate at speed was then increased in reach with individuals being able to tell their stories to a much wider audience, again within minutes. 

Now Twitter has taken the reach of blogs and increased the speed to another level.  News can be written in the time it takes to write 140 characters and passed from person to person via “retweeting” in a matter of a couple of seconds. This means news travels at a much greater speed than even blogs can achieve.

Permission 

In a “traditional” social networking environment, like Facebook for instance, there needs to be two sided permission. I have to want to be your friend and you have to want to be mine for communication to occur. So I have two choices – to be, or not to be, your friend. 

In Twitter’s case if you start to follow me I have three choices. I can say no and block you. I can say yes and follow you back. Both basically the same options as with social networking. But I also have a third option. I can let you follow me, but not follow you back. This allows people who want to know more about a person and what they have to say to listen in without the person you are following having to follow you back. This partially explains the growth in celebrity tweeters. This gives huge amounts of flexibility in the nature of the relationships that participants in the Twitter community can enjoy. 

Relevance 

This is crucial in any form of communication as it is only through being relevant to someone that you can ever achieve any form of influence. 

The permission choices above allow participants to also have much greater control over the relevance of the information and relationships they have. If I decide that someone I have been following is irrelevant to me I can just stop following them. If I see that someone is talking about a topic that is relevant to me, e.g. a search in Twitter for my company name, I can choose to start following them and listen to what they say and finally I can potentially start a conversation with them about that topic if they want to talk back to me. 

But again the other participants also have all of these choices so we are all able to decide who is relevant to us. It is this choice, our own personal relevance filter, which makes for a more efficient dialogue. 

What do others think? What characteristic/s of Twitter do others think explain its adoption?

I was reminded of the quote when reading last week about Eric Schmidt’s comments regarding Twitter and the concept of Twitter as a search engine. Drew Benvie is also carrying out a Twitter search experiment which has resulted in some discussion today. Those with more knowledge of these things than I will probably be able to point out many other reasons but IMHO Google’s success in search was based on five (probably pretty obvious) key factors:

- a simple interface
- low time to get started
- quick
- relevant results
- high coverage of topics

So how does Twitter compare? The table below is my (basic) attempt to summarise a comparison of the two against these five factors. I have added the last two to highlight the key differences as I see it between the basis for the responses. 

Conclusions?

For those active members of the Twitter community (like @drewb for example) I think that:

- the potential for increased trust due to the basis of response being real people and;
- for the same reason (potentially) increased relevance of the “results”

are likely to mean that they use Twitter more frequently to answer some of the questions they would have directed towards Google in the past.

However I suspect that these early adopters are the sort of internet sophisticates that already use a wider variety of means to find information – Social bookmarking, Blog searches etc.

For those occasional Twitter users, and those outside of the community altogether, Twitter has a way to go before it will be a significant search competitor to Google in market share terms for the key reason of time investment. 

So for the majority of the world’s 1.5bn internet users I suspect that the ease of getting an answer from Google will continue their hegemony of the search market for the foreseeable future – however long that is these days!

When I was growing up in the 1970/80s a fan letter to a pop star was something that took a lot of time and effort.

First of all you had to have an idea of where to send it. If the address of the record company wasn’t on the sleeve such research would probably involve a trip to the library. Next you would probably need to hand write the letter. Then put it in an envelope, walk to the Post Office, buy a stamp and put it in the mail. Then wait….and wait….and wait…and wait some more…

If you were really lucky then perhaps, after what would seem like an inordinate amount of time later, you would get a two line letter back from some faceless person saying “thank you for your letter to XXXX. Please find enclosed a picture of XXXX” or something similar.

The sender would be over the moon and would probably dine out on this story in the schoolyard for weeks – their friends clamouring to see a glimpse of the picture. Oh and of course if you were really lucky it would be a SIGNED picture – WOW!

Now fast forward to February 2009 and I am an up and coming artist using MySpace and Facebook to connect with my fans and build up a community around my music. I am able to publish new material, announce things like new tour dates in advance and give them an insight into what I am up to. Fans can chat to each other and build their own networks based on their shared interest in my music. That schoolyard has got a lot bigger.

However if a fan writes on my Facebook wall they probably accept that it is more of a promotional tool rather than me personally and might more readily accept that I won’t be responding individually to everyone. In a sense the site itself is a 21st century multimedia version of the standard picture fans got in response to their 1970s letters.

But a true fan still wants a SIGNED one. Something personal just for them. Now let’s say the artist joins Twitter. Its easy for them to do (assuming their name is available), after all they only have to type up to 140 characters a few times a day maybe, and all from their mobile. Not a great deal of time to invest. Next thing they know they have 5,000 followers, then 10,000. The artist themselves only follows a handful of fellow music industry people and their “real” friends.

Then those followers start “@”ing them like crazy. Because the difference to the 1970s is that now the fans’ required investment is really low as well. It takes them seconds to @XXXX from their own phone and they know it goes to XXXX directly. Suddenly in this world fanmail goes through the roof. What do they do? Ignore them? But that might lead to some really upset fans. Respond to every tweet? Very time consuming. Delegate responding to someone else? Yeah but now it’s not authentic and will the fans respond badly to this?

It’s all too soon to tell. But what one can see is that in the 1970s the volume and expectations of fanmail were low as it took a lot of time to send a letter and it was to someone so remote that any response was fantastic.

On Twitter the potential for volume and expectations to be high are real and artists need to consider the potential issues around this before diving into this exciting new world.

As part of my presentation I covered using your website statistics to help you plan and measure the success of your online PR activities. For those of you who aren’t yet active in the online world the following is a (slightly) edited version of an article from my latest Fresh Business Thinking online PR newsletter which covered this topic. 

How your website analytics can help your online PR 

One of the great things about the Online Media World is that nearly everything you want to monitor or measure is there to be found. In the “real” world it is almost impossible to know what people are saying about you to their friends or colleagues in the pub or round the water cooler. Online there is a vast array of tools which allow you to track what people are saying about you including RSS, social bookmarking and Twitter. 

But one of the less obvious PR tools in your armoury is your website statistics package. If you aren’t using a website statistics package yet to track activity on your site then if you only do one thing after reading this article make it signing up for such a service. Google Analytics for example is free, links to their AdWords system and can track multiple websites from one simple to use dashboard. 

Why is this relevant to Online PR? Because amongst other things it tells you a number of significant pieces of information about your public relations activity. 

1. Referring sites No.1 – You can use your analytics package to tell you if articles that have been written about you in response to, for instance, a news release, subsequently send traffic to your website. Assuming they included a link to your site in the article of course. 

2. Referring sites No.2 – What about other news sites that are sending visitors to your website? These sites must be talking about you and by tracking these referrals you can then visit these sites and see what they said and potentially start a dialogue with them if you think you have more information they might find of interest. 

3. Referring sites No.3 – Are you getting visits from social bookmarking sites such as Delicious, social networking sites such as Facebook or microblogging sites such as Twitter? If you are then it could be worth your while investing time in finding out what the relevant members of these communities think is interesting enough to spend time sharing, commenting or talking about you. 

4. Keywords – The keywords that are driving traffic to your website also gives you an indication of what people find interesting about you. This could be useful when thinking about what stories might be of relevant as part of your online PR activities. 

5. Visitor information – Are you getting visits from particular geographic locations? If so are they markets you currently operate in and try and target from a promotional perspective? If not then perhaps it is worth considering engaging these visitors to understand why they find your organisation relevant. 

These are just a few examples of how your website statistics can give you an insight into what people find interesting about you and help you to craft a much more effective online PR strategy that is based around starting conversations with people who are relevant to you and about topics they want to talk about.

In the meantime the news has continued to be a little bleak on the economic front, to say the least, and I could choose from a whole string of big numbers to talk about e.g. £3,000bn. However I want to focus on a smaller number – £Nil.

I wrote the following articles for a recent Fresh Business Thinking newsletter about some of the free tools that exist that can aid your business’s online communications and reputation management. The social media experts out there won’t find anything new, but perhaps those of you that are less familiar with the Web 2.0 world might find something of interest.

What the world thinks is interesting about you! – Social Bookmarking explained

At the bottom of every article on the BBC website is a little box entitled “Bookmark with:”. In that box are some icons labelled “delicious”, “digg”, “reddit”, “facebook” and “stumble upon”. I suspect most readers have heard of Facebook by now, but perhaps not the other four. In fact Facebook is actually the odd one out as it is a social networking site rather than a bookmarking one. The others allow users to tag, comment, vote for or in some other way save and recommend online content for both their own future use but also for all other members of that community.

A “tag” is where a reader uses a word or phrase to categorise a relevant piece of content such as a webpage or blog post for future use. The power of the social element of these virtual bookmarks is the potential for online word of mouth that this creates. Having tagged an article in Delicious with a specific keyword allows other people to find it – and other articles like it – by using that tag as a keyword search term. But equally useful, these tools also show the popularity of a webpage by counting the number of people who have tagged it in their own Delicious account.

For example take this article from the BBC’s website published just before New Year in 2005
http://news.bbc.co.uk/1/hi/magazine/4566526.stm

This URL has been saved 642 times (at time of writing) and the list of those 642 people can be found here:

http://delicious.com/url/3ffb4f576a0b99b7979fe3a449618a8e

You can see from this page that the most common tag was “news”, but that a high number of people also found it relevant to “culture” and “humour”. You can also see by clicking on the names of the people listed what other articles they have bookmarked and therefore what other interests they have. For instance “kappuchino” who bookmarked the article on 18th July 2008 has bookmarked 391 pages and based on their top tags would appear to be interested in web design.

You will also notice the durability of the Internet. Over a third of the bookmarks were created after the end of January 2006 – over a month after the article’s publication and over 90 of the bookmarks were created in December 2006 the year after publication. Finally there is the ability to subscribe to updates via RSS that allows you to monitor when new people decide to bookmark this page in the future.

So how does this apply to my business you might ask? Well apart from being a great way to bookmark content yourself and find articles for research it is also a reputation management tool. I am sure many of you have thought to put the name of your organisation into Google to see what comes up, but how many of you have done the same with social bookmarking sites? Remember this is real people’s responses to online content – virtual word of mouth. What are they saying about you and your organisation?

Try visiting delicious.com and doing a search for your organisation’s name or products – you might be surprised to learn what people think is interesting about you!

A great overview of how social bookmarking works can be found in this video by Commoncraft http://uk.youtube.com/watch?v=x66lV7GOcNU

Tweet Tweet! The wonderful world of Twitter

What is Twitter I hear you ask? Twitter is a microblogging platform. What is microblogging I now hear you ask?! Micro blogging is a form of blogging that allows users to write brief text updates (140 characters in Twitter’s case) and publish them, either to be viewed by anyone or by a restricted group which can be chosen by the user. These messages can be submitted by a variety of means, including text messaging from your mobile phone, instant messaging or the web.

The form of dialogue that this engenders is multi-faceted. It can be direct between two parties; a group debate about an issue; passive awareness about what people in your community are doing or thinking or a sharing of information or resources. This flexibility combined with the brief nature of dialogue makes for a very dynamic and sometimes chaotic conversation!

The tool has been used by a number of interesting organisations or situations. The Phoenix Mars mission operation used the tool to keep interested parties appraised on the mission’s progress resulting in nearly 40,000 followers http://twitter.com/MarsPhoenix. And perhaps the most famous Twitterer is Barack Obama whose campaign used the tool right up until his election and had over 140,000 followers.

A recent article in the US version of PR Week illustrates the growing use within the Communications industry at large “From a PR standpoint, Twitter is a great way to seek and create media opportunities. Reporters are now proactively tweeting to inform their followers of upcoming projects to help find spokespeople. It’s also a valuable tool to help monitor key trends, breaking news, and find out about reporters’ interests.”

It’s the same over here in the UK too. A recent piece of research by webitpr’s ex Social Media Manager, Stephen Davies, found a number of UK journalists and PR professionals actively using Twitter in their day-to-day professional lives.

But as with social bookmarking the benefit of this tool is both in its use as a way of communicating online and being part of a relevant community to either you and/or your business and also as a way to monitor the word of mouth about your organisation. In a similar way to social bookmarking you can track what people are saying about you in the Twitter community. Visit http://search.twitter.com and you can search for references to a search term that has been used in “tweets” – a tweet is the term used to describe a Twitter message. You can then subscribe to an RSS feed of future tweets that mention this search term and so track references as they occur. You can find even more ways you can use Twitter here.

So what are you waiting for? Start tweeting!

Really Simple Story Reading

RSS – Really Simple Syndication – is a form of web feed that supplies subscribers with a feed of new content. Think of them as your own virtual newspaper boy or girl, bringing you the news or information you select as and when it is published or updated.

The concept has actually been around in one form or other since 1999, but has become much more popular in the last few years. This is probably to some degree driven by both embedding the ability to receive RSS feeds into Internet Browsers, but also the growth in blogs. As bloggers often post erratically the benefit of an RSS feed is that instead of you having to keep checking the site in question for new content, the content comes to you when it is published. This saves the reader a lot of time potentially wasted checking sites when nothing has changed.

In order to gain the most from RSS feeds it is a very good move to subscribe to an RSS reader. There are many of these out there – Google Reader, Bloglines, Feed Demon are some examples – some are free and some charge a fee. I personally use one of the free ones – Bloglines, www.bloglines.com. The power of a service such as Bloglines is that not only can you bring together and organise all of the feeds that you subscribe to in one place, but you can then access these feeds from anywhere where you can access the Internet. In practice this means I am able to catch up with my feeds at work, home and even on the move via my mobile phone. This flexibility means I can read the stories it delivers to me pretty much anytime and anyplace – even while out walking my dog!

So what sites can you subscribe to? The answer is pretty much any. From mainstream editorial news sites such as the bbc.co.uk or guardian.co.uk to blogs such as techcrunch.com or gigaom.com. You can also subscribe to the kind of reputation management RSS feeds mentioned in the earlier social bookmarking and microblogging articles. That way you can stay on top of what people are saying about your organisation online. In fact Bloglines itself is a community and as with the other community tools you can even search within Bloglines for particular terms and so harness the RSS feeds of the community as a whole for your research or reputation management purposes. In a nutshell, if someone somewhere mentions your company on one of the many millions of blogs out there, RSS will let you know as it happens.

Given the power of this tool it is perhaps unsurprising that a recent piece of research put the number of people who subscribe to RSS feeds in the US at around 30million.

Watch out newspaper boys and girls, your days could be numbered!

Another Commoncraft guide to RSS can be found here http://uk.youtube.com/watch?v=0klgLsSxGsU.

YouTube – Its all about the kids isn’t it?

In the last few years the concept of User Generated Content (UGC) i.e. content created and published by consumers themselves has taken off like the proverbial rocket, but many people mistakenly see this as something only relevant to the young. The most obvious example of this is YouTube. YouTube was only created in February 2005 and yet was sold to Google in November 2006 for $1.65bn and is now ranked as the 3rd most visited website on the planet by the website tracking site Alexa (after Yahoo and Google). The site is so popular in the US that ComScore reported that in July 2008 over five billion videos were watched on YouTube in the US alone by over 92 million people. Staggering figures for a site that didn’t exist four years ago.

The influence of YouTube has been seen most recently in the US presidential election where many commentators attributed a significant amount of Barack Obama’s success to the video sharing site. With some going as far as to suggest that George W. Bush may not have been successful in the previous election had YouTube been in existence at that time.

But YouTube isn’t just about kids uploading funny videos or even politician’s speeches (or bloopers). It can also be a powerful business tool. As well as major content providers and broadcasters such as the BBC now having channels on the platform, a significant number of organisations have been using YouTube as a way of sharing their message and reaching new audiences though the medium of video rather than the written word. The sharing nature of the platform also means that content can be passed around easily between communities and can be posted on external sites using YouTube’s embed code that references back to the video itself.

Setting up an account is simple and subject to some size constraints you can then upload your videos, give them titles and descriptions and then start to share links to the video or embed the code on your own website or blog. If others find they like the video or want to comment on it then they can do likewise.

Sites such as YouTube have made it possible for any organisation to be its own media company. My own company, webitpr, has used the platform to share our video (below) about the Social Media News Release (SMNR) concept. The SMNR is a new form or press release which combines traditional press release text content, with multimedia and social media elements, and is used as an online PR tool to allow news content to be easily shared and discussed. The video we created last summer has been hosted on YouTube since it was produced and has to date been viewed over 8,300 times and linked to by 34 blogs. The effect of this has not only been to increase our profile but has also brought search engine optimisation (SEO) benefits with the video being ranked on the first page of both google.com and google.co.uk for a search for “social media news release”.

All of which hopefully proves that this isn’t just about the kids after all.