How IPO will change Twitter

The need to please shareholders could alter user experience

Though most of Twitter’s 200 million users have probably not even given 140 characters’ worth of thought to the company’s much-anticipated IPO filed Thursday, the social media giant’s decision to go public will likely change the site in innumerable ways.

Twitter regulars need look no further than rival Facebook /quotes/zigman/9962609/quotes/nls/fb FB -2.18% for a taste of what happens once a company becomes beholden to shareholders, analysts say. And daily deal site Groupon /quotes/zigman/7212269/quotes/nls/grpn GRPN -3.99% , Amazon /quotes/zigman/63011/quotes/nls/amzn AMZN -1.79% , and even Yelp /quotes/zigman/9021597/quotes/nls/yelp YELP +0.47% . “Like it or not, after the IPO Twitter will be a very different social media service,” says technology industry analyst Jeff Kagan. Indeed, the company’s IPO filing states: “We are investing to improve our applications for feature phones in order to improve our ability to monetize our products”

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There may be new experiments in advertising and other efforts to boost revenue, some experts say. A surge in advertising will be the most obvious, if painful, change for Twitter fans. “Since ads that feature rich media like photos, videos and slideshows take up more space and get more attention, your Twitter stream will start to look more like Facebook,” says Jason Keath, CEO of SocialFresh.com, a social media training company. But, he says, sponsored tweets will continue to blend in with the site.

A spike in advertising could be the least of some Twitter users’ worries. Twitter collects lucrative information on what consumers are reading and buying online, Keath says. “Twitter knows what websites we have visited,” he says. “It knows what topics we like to talk about and who we like to listen to (or follow). This is very powerful advertising data.” After the IPO, Twitter will be under even more pressure from investors to collect data, says Michael Pachter, managing director of equity research at Wedbush Securities.

In matters of privacy, analysts say Facebook may not be the best test case for Twitter. Facebook has been repeatedly criticized by consumer advocates for changing the site’s privacy policy and using members’ pictures and names for marketing. In fact, the Federal Trade Commission said last week it’s investigating whether Facebook infringed on members’ privacy rights when it made the latest changes to the company’s privacy policies two weeks ago.

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Will an IPO Ruin Twitter?

Though most of Twitter's 200 million users have probably not even given 140 characters' worth of thought to the company's upcoming IPO, the social media giant's decision to go public will likely change the site in innumerable ways. Quentin Fottrell reports on Lunch Break. Photo: Getty Images.

However, some of the changes are likely to improve the Twitter experience, with new features such as handling of images and private messages longer than the standard tweet, as is possible on Facebook, Kagan says.

Images will become a bigger feature on Twitter just like they have on Facebook and Yelp. “That’s definitely the direction they’re going in,” says Claude Zdanow, founder and president of Stadiumred, a New York entertainment company. Last year, Twitter added “header” pictures—larger images that run next to a person’s profile picture. However, tweeted images can only be seen via hyperlink.

Another popular pastime missing from Twitter: a photo-filter app like Instagram. “The layout of the site will change dramatically after the IPO,” says Darren R. Hayes, assistant professor at Pace University’s Seidenberg School of Computer Science and Information Systems in New York City. After Facebook bought photo-filter site Instagram last year and, Twitter responded by acquiring video-sharing service Vine.

Also see: 5 ways Facebook can make more money off you

Like Facebook and LinkedIn, Twitter users may be given an incentive to use their real names, perhaps by expanding the benefits of having a “verified” account—those blue checkmarks typically reserved to confirm the veracity of public figures on the site, says social media consultant Jennifer P. Brown. Parody Twitter accounts are entertaining, but Brown says fake names make it harder for Twitter to track people and collect data for advertisers.

Twitter’s power users have also been looking for a more sophisticated filtering system, something that could be prompted by additional focus on advertising, Zdanow says. Instead of being bombarded with random tweets, users should be able to filter posts according to subject matter, he says. Right now that is only possible with individual search terms or hashtags: “Twitter users want to deal with the large amount of information in a more user-friendly way. What if I want to see more tweets about music or technology? It would be great if I could do that.”

Whether users want it or not, the site may also look to boost opportunities for commerce on the site, perhaps along the lines of Groupon’s location-based daily deals. Amazon.com and Facebook’s “gifts” features could be rolled into one powerful retail service on Twitter, Brown says. “Imagine hearing about an item on sale and simply replying with a code that charges the item to a card on file,” Brown says.

To be fair, Facebook and other competitors have also borrowed many of Twitter’s features. Facebook recently introduced Twitter’s hashtag—a way to link to other stories on the site—and revamped its Timeline to make it more conducive to breaking news.

The IPO is unlikely to change one thing, says Brown: Twitter’s famous 140-character tweets will go untouched.

Also see: 5 of the most profitable tweets ever

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