Starbucks Brews a Plan to Twitter for Dollars

A Starbucks outlet in New York.

Mark Lennihan/AP

• Share

Starbucks (SBUX) will try to revive its flagging fortunes with an assault on Web 2.0. Sales at the coffee chain have been falling, to some extent because it charges $5 a cup for its most fancy drinks. American are also brewing more coffee at home to save money during the recession.

As a result of the unfavorable trends, Starbucks has posted poor earnings, watched it stock price slide, and closed stores and cut workers. (See pictures of coffee in Italy.)

Starbucks is joining a long line of large companies that want to begin to use Twitter, perhaps the most successful Web 2.0 launch in over a year, to bring in customers. According to The New York Times, Starbucks will run print ads that encourage people to look for its new marketing messages be alerting them to the campaign using the Twitter text messaging service.

The trouble with the idea is that Twitter users may not see the service as a commercial enterprise that should be used to bombard them with advertising. Users of MySpace and Facebook have already staged revolts against the services being used to solicit them to buy products and services. People who use Twitter to communicate with friends may feel the same way. If the service becomes a place where conversations among users are interrupted by marketing messages, Twitter could actually begin to lose users. (Read: "Your Facebook Relationship Status: It's Complicated.")

Starbucks has fostered the image of being customer friendly and has not resorted to aggressive advertising to bring in new coffee drinkers. Flooding Twitter in an attempt to drive people to its coffee shops may back fire especially if it comes across as crass commercialism.

— Douglas A. McIntyre

Read: "Obama and Twitter: White House Social-Networking".

For constant business updates, go to 24/7wallst.com.