Twitter's Iran boost no guarantee of success

(breakingviews.com) -- Twitter's Internet messaging service is proving to be more than a tool for gossipy adolescents. Media around the world are using so-called tweets -- messages sent through the service -- from Tehran to supplement their coverage of the post-election upheaval. This has given the revenue-free Web site a credibility boost. But Twitter still hasn't proven it can leverage its popularity to make money.

Twitter's messages are sent and received instantly via computers and mobile phones. The site has some 10 million members, from celebrities like Britney Spears to companies like the New York Times (NYT).

Iran's election has been a boon for the company. Global media outlets including the BBC and CNN are broadcasting tweets about the protests. In fact, Twitter has proved such a useful source of information about the upheaval that the U.S. government asked the company to postpone a scheduled maintenance so it could stay online.

Up until now, Twitter has essentially been a venue for angst-ridden teenagers and public relations stunts. That has made the financial interest drawn by the startup, including rumors that Google (GOOG, Fortune 500) was in talks to buy it for more than $250 million, perplexing.

But the discovery of its utility as a real-time reporting tool shows it might have some value. That could help justify its acquisition by a media outlet, or an Internet giant with aspirations in that field, like Google.

That doesn't mean Twitter will necessarily find a way to spin money. And the credibility and balance of the news it disseminates are questionable. Most Iranians posting tweets are likely to be young, educated and reasonably wealthy, and so it has a built-in bias. And there are already reports -- on Twitter, of course -- that the Iranian government was creating fake Twitter accounts to spread propaganda.

Plus, the Iranian situation is unusual in that there are few foreign journalists on the ground there. Twitter would have little utility in reporting from, say, the floor of the New York Stock Exchange. Twitter may be one of the most talked-about Internet businesses in the world right now, but it has far to go before it proves itself worthy of the chatter.