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Oh no, not more Twitter-related 'news'

Couple of stories from the FT this week that demonstrate the value of social networks to the financial world (or alternatively, the media's obsession with Twitter and Facebook - you decide).

First up, Nomura has apparently been using Facebook to track down Lehman Brothers graduate trainees so it can offer them jobs. I suppose it makes a nice change to see the site being used to find staff rather than fire them.

Meanwhile, a site called StockTwits - which picks up tweets from traders - has proved a bit of a hit, signing up around 90,000 people. Users tend to be looking for ideas on how others are trading rather than actual tips on stocks. This is not particularly surprising because, as Finextra pointed out when StreamBase connected its CEP platform to Twitter, the microblogging site is a notoriously unreliable source of information.

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A Finextra member
A Finextra member 21 September, 2009, 11:13Be the first to give this comment the thumbs up 0 likes

It seems as if the two most significant areas where Twitter can provide actionable information are when a company representative speaks at a meeting or conference and provides information either negative or favorable about the company.  This can often happen unintentionally and the corporate executives can make a comment that will drive stock up or down, without even knowing it, such as when an executive demostrates that he doesn't understand his companies market.

Another aspect is measuring consumer sentiment and corporate goodwill.  More and more, consumers are interacting with brands via Twitter and the buzz generated can be an important indicator of future sales.

As to stock tips, they are probably the least reliable piece of information one can extra from Twitter.  People providing stock tips are most likely trying to drive the market one way or another and probably should be avoided.

For a final thought, I recommend Shel Israel's book, Twitterville:  How Businesses Can Thrive in the New Global Neighborhoods  

It explores the relationship between corporations and Twitter in a way that investors really should try to understand.

A Finextra member
A Finextra member 15 October, 2009, 12:52Be the first to give this comment the thumbs up 0 likes

In the world of interruption v permissive marketing, I know where I'd class Twitter. I'm very picky about who I spent time following, and if they abuse my implicit trust, they're soon unfollowed.

Matt White

Matt White

North America editor

Finextra

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