In short it is a micro blogging service; you type and post short messages that can be read by anyone else. The tweets as they are called are less than 140 characters and initially it was about what you are doing (having breakfast, reading the paper, or as P-Diddy recently twittered, having a bubble bath with an Oscar).
So does it have any real SEO value? Headlines in a popular politics website are being twittered and the URL's clicks are being tracked using an URL shortening service cli.gs which allows us to see just how much traffic is coming in - typically only about 30 visits per story. Not much, but not a bad bit of additional free traffic.
I think the real SEO value of Twitter at the moment is actually in research and communication within the community. I listen to SEO experts and those with the greatest influence (as well as Stephen Fry); as new aspects of SEO come to light it generally gets discussed by this community quickly and decisively reviewed. I also stay in touch with thought leaders who talk about technological developments. I express a few thoughts and get interesting opinions back. Generally my Twitters are a little more professional in nature, with the odd personal comment dropped in, but it isn’t like my Facebook status – which is uniquely personal, opinionated and unrelated to my profession.
Some related links -
TwitterStream visualisations - requires Java
http://twitter.com/dergal - my personal tweets
http://twitter.com/stephenfry - more interesting tweets
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