From Facebook (FB) to LinkedIn (LNKD) to Groupon (GRPN) to Pandora (P), there is no denying that both Wall Street and the internet have forever changed thanks to the meteoric rise of social media. Not long ago, however, investors seemingly cast aside these companies, having deja vu of the Dot-com bubble in the ’90s, arguing that an investment in this industry would likely turn sour. When looking back at 2012, these predictions did seemingly hold some truth – with several social media and tech companies suffering double-digit losses. Consequently, investors had little faith in the industry, especially after the unforgettable, yet highly anticipated, blunder that was Facebook’s IPO .

In 2013, however, the social media landscape looks quite different; Facebook shares have finally risen above their IPO price, while Groupon, Yelp, and LinkedIn have all clocked in attractive returns. And as social media stocks continue their tear, Twitter has seemingly picked an opportune time to announce its plans to go public and list with the New York Stock Exchange.

Inside Twitter

Twitter officially began its roots in March of 2006, created by then-New York University student Jack Dorsey. In its short history, Twitter has managed to accumulated more than 555 million active registered users, who on average tweet 58 million times a day or roughly 9,100 tweets per second. The site boasts a ranking of one of the 10 most-visited websites worldwide, and has repeatedly been ranked as one of the fastest growing sites on the web. As users and pageviews continue to grow rapidly, marketers around the world have been chomping at the bit to tap into the power that Twitter holds .

According to eMarketer, Twitter is expected to earn $583 million in advertising revenue in 2013, roughly $950 million in 2014, and a whopping $1.33 billion in 2015. In addition to beefing up its ad revenue, Twitter has also focused on acquiring key companies to expand its business, including MoPub, Crashlytics, TweetDeck, Mixer Labs, Ubalo, and Smallthought Systems. Estimates for the company’s valuation, based on these and similar numbers, range from $5 billion to $9 billion.

Social Media Stocks & ETFs Catch Fire

Regardless of Twitter’s seemingly attractive valuation estimates, the timing of the company’s IPO alone could prove highly beneficial. Year-to-date, social media stocks have skyrocketed, outperforming several broad-market indexes .

From the start of 2013, here is a look at where the top social media companies are now (Please note that all of the charts below are based on weekly returns, using adjusted closing prices, starting from 1/02/2013 up until 9/23/13):

Global X’s Social Media Index ETF , whose top 5 holdings are the stocks featured above, has also benefited from the rally, gaining more than 40% year-to-date and outperforming the Nasdaq ETF by a significant margin:

SOCL’s 2013 performance thus far is a vast improvement from the previous year’s 0.37% loss. The fund has also enjoyed a significant uptick in inflows, with assets under management totaling more than $25.8 million. More than likely, Twitter’s IPO will once again attract investor attention and could open up even more lucrative opportunities.

Follow me on Twitter @DPylypczak.

Disclosure: No positions at time of writing.

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