I have a client in the social media market who refers to the Holy Trinity of Facebook, LinkedIn, and Twitter. Certainly these are the three most popular social media destinations where users flock to hear the latest news and connect with friends, family, and associates. But as I have noted previously in this blog, these are private companies, they are not part of the Web or the Internet, although they certainly use those resources. And while the open structure of the Internet means that the Web is likely to endure, these companies are capitalists after all and will only continue to grow as they become profitable.
Which brings us to Twitter.
My wife recently directed me to an article in Fortune entitled “Trouble @Twitter,” and the story read to me like the biography of a typical Silicon Valley startup,with all it’s ups and downs. One of the great things about technological innovation is the ride is never boring, and today’s boom can be tomorrow’s bust. You can have the best technology on the planet, but without a solid understanding of your roadmap and the value your customers get from your service, there’s no guarantee of staying power. (How many remember to dot.bomb bubble a decade ago when the slogan was, “If you build it they will come”?)
Okay, the concept of microblogging is cool, and Twitter has developed a huge following – 200 million registered users compared to 600 million for Facebook. However, how many of those users are active? But what is Twitter doing to monetize all that traffic? They’ve tried paid tweets, but is that really paying off? This from the Fortune article:
Just two years ago Twitter was the hottest thing on the web. But in the past year U.S. traffic at Twitter.com, the site users visit to read and broadcast 140-character messages, has leveled off. Nearly half the people who have Twitter accounts are no longer active on the network, according to an ExactTarget report from January 2011. It has been months — an eternity in Silicon Valley — since the company rolled out a new product that excited consumers. Facebook’s Mark Zuckerberg used to watch developments at Twitter obsessively; now he pays much less attention to the rival service. Meanwhile companies are hungry to advertise, but Twitter hasn’t been able to provide marketers with enough opportunities. Last year the company pulled in a mere $45 million in ad revenue, according to research firm eMarketer. Facebook brought in $1.86 billion.
It’s interesting that Twitter was born out of chaos. As the article explains, co-founders Evan Williams and Jack Dorsey found their start-up, Odeo, made obsolete by iTunes and were trying to figure out what to do with their venture money when Dorsey Came up with Twttr to let other people know what you were up to. I think any business expert will agree that “throwing it against the wall to see what sticks” is not a sound business strategy, yet that was the birth of Twitter. To this day, Twitter seems to lack a clear business objective, partially because of changes in leadership, but mostly because the vision seems to have been lacking from the start. Mark Zuckerberg has been with Facebook since Day 1, guiding its operations and providing a consistent vision for growth that seems to be paying off. Twitter doesn’t have those same strong roots, and it shows.
So even the most popular technologies can fail without proper nurturing. Remember the Betamax? Imagine what would happen if Twitter pulled the plug tomorrow because they couldn’t #gettheiracttogether. The short answer is, not much. The world would keep turning and the loss of Twitter would be noticed by a fraction of those 200 million subscribers, but something else would rise in its place. Another platform would emerge to make up the third part of the Holy Trinity of social media.
I am not sounding the death knell for Twitter. They have a huge market opportunity, but they still haven’t figured out how to make it pay. Once they find the right formula, they could be innovators for years to come, or they could fade away. But the hole they would leave will be filled by another entrepreneur with a better business plan, or by an existing company that can acquire Twitter and take it to the next level.
Twitter has demonstrated the power of connection. And whether they succeed or fail, they have proven that we want to connect, even at 140 characters. No matter what for it takes, the power of connection will continue to open up new possibilities for marketers.