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No Need for Jitters Over Twitter

CHICAGO ( TheStreet) -- It's been a dizzying decade for the tech-challenged business owner. Staying current means sifting through a confusing array of "it" websites, from Flickr to Facebook to Foursquare, each supposedly with the power to transform the way businesses and customers communicate.

At first glance, Twitter was an unlikely Internet success story. The 140-character limit on messages seemed designed for transmitting superficial information. Did anyone really want to get updates from friends about what they ate for breakfast?

But Twitter managed to confound expectations. Celebs such as Lady Gaga and Justin Bieber have millions following their every typed insight. Even more impressively, Twitter has played a part in major world events, as users sent breaking news during uprisings in Egypt and Iran and helped volunteers coordinate rescue efforts in Japan.

In a few short years, Twitter has joined Facebook as a social-media leader -- which has left many businesses confused and nervous. Companies know they need a social media strategy. But what exactly are they supposed to do with Twitter?

"Twitter is a useful tool for many small businesses," says Steve King, partner at the small business research and consulting firm Emergent Research and author of the Small Business Labs blog. "We use it most every day, and we have a small business. Having said that, we also think small businesses should not use Twitter just because of the hype -- and there's a lot of Twitter hype."

Drumming up sales through Twitter is no easy task. Consider the numbers: While the vast majority of adult Americans are online to some extent--using email or shopping on Amazon (AMZN - Get Report) -- King estimates that less than 8% have Twitter accounts, and less than half of them use the account more than once a month.

"This means only about 4% of adult Americans use Twitter with any regularity," King says. "To be useful as a sales and marketing tool, the customers and/or target market of a small business would need to be in that 4%."

A recent study by Yahoo (YHOO - Get Report) Research found that about half of all tweets are generated by just 20,000 "elite" users--celebrities, media organizations and bloggers who have name recognition in their industry. Huge followings are possible, but businesses don't tend to attract them.
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