When it comes to the Internet, there are trends and there are fads. During the net’s infancy, enough companies created websites to make the move to the Information Superhighway (remember that term?) a trend. Facebook was a fad that, with more than 20M users, became a trend. Make no mistake: Twitter is a phenomenon that can’t be ignored. It has more than 7M users, a 1382% YoY growth rate, and 41.7% of its users are in the demographic sweet spot: 35 to 49 years old.
But this fad isn’t yet a trend, and social networking by 140 characters is at a significant crossroads.
Make no mistake: Twitter is a phenomenon that can’t be ignored. It has more than 7M users, a 1,382% YoY growth rate, and 41.7% of its users are in the demographic sweet spot: 35 to 49 years old.
Ratings giant Nielson Online reports more than 60% of Twitter users stop using the service after the Honeymoon period. For some reason following Ashton Kutcher’s pontifications on life and Oprah Winfrey’s tweets about her girlfriend Gail aren’t enough to keep us coming back.
The problem is algebraic
Neilson Online VP David Martin says there’s a simple formula to determine whether or not a social networking site will get the necessary Internet reach to be self sustaining. Here’s the math: y=0.2073In(x) ÷ 0.8792. Without showing his work (and subsequently losing marks), Martin reveals that with Twitter’s 40% retention rate, less than 10% of the Internet is going to end up using your service. By contrast, Facebook with its 70% retention rate enjoys a 40% reach: 2 out of every 5 web surfers have a connection to Facebook.
Twitter’s retention problem is that nobody really cares what you ate for lunch. Or that some jerk just took your parking space. The digital navel gazing can only hold our attention for so long. So what’s the point?
Ashton Kutcher beat CNN to 1,000,000 followers. But it’s not going to be the Mrs. Robinson chasing actor who saves Twitter: that’s going to fall to the runner-up and its competitors.
News services like CNN, The Wall Street Journal, and others have jumped on the Twitter bandwagon in a big way. While still in its “fad” stage, 7M Twits is nothing to sneeze at, and the dinosaur media executives trying to pull themselves out of the tar pits recognize the potential. Twitter needs to capitalize on this, and it’s not. If the Tweeters find long-term value in having an account, they’ll be more likely to stick around, and news-oriented alerts is a major opportunity.
Facebook is the world’s biggest online photo sharing site — not Flickr, the Yahoo-purchased service prefered by photogs worldwide. Flickr is robust. Facebook’s photo offering is not. But what makes Facebook more successful is there’s more to the site than just photos. It’s also videos. And “hey ain’t this a cool site” links. And “25 things you didn’t know about me” notes. And online chat.
Twitter’s problem is simple: it’s simple.
While Twitter doesn’t need to duplicate Facebook to retain its members, it needs to be better at what it does. Twitter’s problem is simple: it’s simple. 140 characters. No more. And there’s no easy way to track conversations — everything basically appears in order of the tweets. Even the most basic web forum offers “nesting” — where replies are seen indented directly below the initial message.
For Twitter to go from fad to trend, it’s going to have to get a lot more friendly. Dump the 140 character limit. Give me a more robust “profile” section that offers more than just a photo of the Twit I’m following. Open up the Twitter back-office so CNN and other websites have easier access to integrating the service into their own websites.
Turning down a reported US$500M offer at the height of the economy may have been a big mistake.
Or they could just accept a fat cheque from Facebook. Turning down a reported US$500M offer at the height of the economy may have been a big mistake. The all-stock offer was based on a US$15B valuation applied to Facebook before the recession hit after Microsoft bought preferred shares in 2007. Today, the rumoured $75M annual cost to send tweets to people’s cellphones may give Facebook a reason to balk at re-opening negotiations — that and the fact they went ahead and turned their own “status update” option into a virtual Twitter, anyway.
Regardless, Twitter is at a crossroads. If it can evolve, it can thrive. Oprah, Ashton and CNN’s Rick Sanchez can’t save on their own.
Too soon to tell