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Twitter is a 'micro-blogging' platform where you can publish what you are doing or thinking in 140 characters or less. Anyone who is following you will see your 'tweet' in their twitter stream or on their phone.
If your account is public then anyone with a Twitter account can follow you. Twitter sends you an email notification when someone starts following you and you can choose to block that person if you wish.
You can follow anyone who has a public account. People with private accounts will have to approve you before you can get their tweets.
That depends on what you want your Twitter account for. Private (or protected) tweets don't appear in the public timeline.
People use Twitter for many things; to share, collaborate, network, have fun, meet up, show off, complain, publicise, the list is endless. How can you use it to benefit your business?
For any organisation it is vital to know what people are saying about your brand, product, service or idea. You can use Twitter Search to monitor the conversation, you don't even need a Twitter account to do it. Handily, you can set up an RSS feed so that you'll receive all updates of this search in your feed reader. You can also follow topics through hashtags.org. Hashtags are a kind of tagging on Twitter, tweets can be tagged and these conversations are aggregated on the hashtags.org website. Here's the recent conversation around the Australian bushfires, tagged with #bushfires. To have your own hashtags indexed you need to follow http://twitter.com/hashtags. There is a great introduction to hashtags here.
The next step in using Twitter is to respond and contribute to the conversation.
Twitter can be a great opportunity to make connections with real people who are engaged with your business, to learn about what your customers think and to give a more personal face to your organisation.
Read about the 5 stages of Twitter acceptance.
Learn how Twitter made Guy Kawasaki's website better.
Read the Guardian guide to Twitter.