Twitter IPO a Subtle Case Study for Users, Advertisers

Tickers in this article: GOOG TWTR

NEW YORK  (TheStreet) - Twitter's initial public offering, priced at $26 a share, will flesh out the multi-billion dollar valuation investors are prepared to don on the burgeoning Internet powerhouse. The IPO may also be a subtle way for Twitter's growing number of users and advertisers to understand the strengths and weaknesses of the company's micro-blogging platform.

IPOs, by their very nature, give insight into how investors are prepared to a value a business. Few share listings, however, say something about the actual business that is being sold to public stock investors.

Twitter's share offering is different.

Prospective investors should spend time on Twitter as it goes public to try and better understand what the San Francisco-based company's appeal is and can be for prospective users and advertisers.

Twitter, after all, is more of a giant leap forward in the dissemination of news and ideas than it is some major technological breakthrough.

Yes, the company is considered a part of the tech sector given its trove of data analytics and the elegance of its novel communication platform. Users are more likely to consider Twitter as part of their daily media, entertainment and news consumption. Advertisers appear to believe Twitter is in an advantaged position when it comes to marketing particular trends like the Super Bowl, a TV finale or an awards show.

In that sense, Twitter's IPO is an event that should highlight the platform's appeal to users and advertisers.

From my vantage point, the company is succeeding in many ways and failing in others.

Twitter as a search product:

Twitter is at heart an advertising company, but it does have analytics and search businesses that some analysts believe can be an under-appreciated source of growth in coming years.

As of Twitter's share open on Thursday morning, search-ability for information related to Twitter's IPO indicated the company is on the cusp of search-related breakthroughs that would far go beyond Google's offerings.

Searching Twitter using the company's ticker -- $ - creates a blur of tweets that makes it so a user looking for a specific piece of information is sifting through a haystack of unconnected information. Hashtags also make Twitter searchable for business and non-business content.

Nevertheless, users who follow a significant amount of Twitter handles that express similar interests may feel information on the network is more immediate and engaging than anything on Google.

Sifting through the Twitter's 'Top Tweet' bar in a search for $TWTR related news, reveals interesting pictures of the company's CEO Dick Costolo on the floor of the New York Stock Exchange, in addition to rumors on the company's opening price from floor traders at the exchange. The Top Tweet bar also filters heavily re-tweeted posts by The New York Times , Vanity Fair , Money Magazine and the like, which would also likely show up on a Google search.