A combination of expansion and evolution is likely to see it extract more money from its 220m existing users and to find many new ones, too. But it is nonetheless surprising that investors are willing to give the business a resounding vote of confidence when so few of the details are known.
In its own pre-IPO document, Twitter acknowledged the danger of losing popularity with its users as it tried to make the transition to a more commercial footing. If adverts become too annoying, or if the Twittersphere is clogged up with pointless tweets it risks antagonising its core audience. That could be bad for business.
What, then, of those fears of a bubble? While the life cycle of a technology company seems to be shrinking – look at Nokia and BlackBerry – for Facebook, and now Twitter, it seems as though the markets are betting on the emergence of new platforms that will become the giant utilities of the internet age. Google and Apple are the new oil companies, mining enormous profits from the vast bases of loyal users who are wedded to their services.
If Twitter and Facebook, however, are to break into their ranks, they must understand an evolving advertising landscape that few yet comprehend. It’s a tall order – the support of the markets will help them to maintain their prime positions, but it offers very few guarantees.
Opec report highlights need for UK fracking
If any further evidence was required to persuade the doubters that it is time to get fracking it came yesterday with the latest energy forecast delivered by the Organisation of Petroleum Exporting Countries (Opec).
According to the group of 12 leading oil-producing nations, the world needs more energy fast and cannot afford to ignore any new potential sources.
Growth in the number of cars on China’s roads – by 2035 there will be 380m of them – has prompted Opec to raise its outlook for world oil demand for the first time in six years. Meeting this expected drawdown on supply it says will require the staggering investment of $ 7.5 trillion (£4.6 trillion), dashing the immediate hopes of British drivers that petrol may eventually fall in price.
With North Sea oil and gas reserves entering the final few decades of conventional production, the report emphasises the urgent need for the Government to encourage more exploration, specifically for onshore shale gas and oil. George Osborne, the Chancellor, is expected to address this in the Autumn Statement with tax breaks for drillers.
What the industry really needs is a sustained push from the Government to educate the public about the benefits of unlocking the nation’s untapped shale energy reserves against the alleged risks to the environment.
New technology and a responsible approach by energy companies means that both ideas are not mutually exclusive. But in a world where China will demand more of the world’s finite supply of energy and natural resources, it is vital for Britain’s future prosperity that we don’t ignore the potential bounty of oil and gas still under our own feet.
Recovery puts pressure on Bank to rethink rates
It is now approaching five years since the Bank of England slashed interest rates to a record low of 0.5pc, but depending on which economists you choose to believe, the Old Lady of Threadneedle Street could be poised to take action soon.
The recovery is no longer nascent, it is gaining traction – and quickly. Businesses are hiring workers at the fastest rate since the late-1990s, while the number of people on jobless benefits is falling at the fastest pace since 1997.
This month’s policy meeting was probably a lively one. The nine members of the Bank’s Monetary Policy Committee are likely to have been divided over the speed with which the economy is recovering – and specifically the expected pace of job creation.
The Bank’s stance on monetary policy and forward guidance is crucial. If it raises rates too quickly, higher mortgage costs could knock some first-time buyers off the housing ladder before they’ve even found their footing on the bottom rung. Too slow, and inflation could quickly get out of control, causing sterling to plunge.
The National Institute of Social and Economic Research believes there is a one-in-five chance the unemployment rate could drop below 7pc before the end of March 2014, compared with the Bank’s current probability of just 5pc. This week’s survey of Britain’s services sector pointed to growth of up to 1.5pc in the fourth quarter. However, other evidence shows purchasing managers’ indices (PMIs) tend to be more optimistic than official growth numbers.
The MPC faced two choices when approving the Bank’s Inflation Report yesterday. Did it keep forward guidance rules the same, suggesting that interest rates will be raised sooner? Or did it move the goalposts on the unemployment rate and promise to keep interest rates on hold for longer? Either way, the outlook for the UK economy has changed. The Bank will come under mounting pressure to follow suit.