Twitter: Growing Pains or Death Knell?

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The Internet is littered with the corpses of failed social networks. Friendster. Orkut. Myspace. Could Twitter be next?

While Twitter’s earnings and revenues grew in its first quarter as a public company, many investors were expecting even bigger earnings. The company also took a one-time loss of $500 million for going public last year. In response, their stock fell 20% after the earnings report was released.

In addition to profits, there are a few other red flags that have gone up for the popular social platform in the last few weeks:

  • Fewer new users are signing up. At one time, it seemed that Twitter would become Pepsi to Facebook’s Coke. Now, their user growth has slowed while growth of other networks (Tumblr, Pinterest) has accelerated.
  • Engagement is down. Twitter users are spending less time on the site, and engaging less with other users on the site and other content on the site.
  • Advertising seems ineffective. While Facebook and Google ads have shown proven return on investment, Twitter has not been so lucky. Many advertisers feel that Twitter’s ad platform has not proven itself and are hesitant to invest in Twitter ads.

Can Twitter save itself before it becomes a cautionary tale like Myspace?

Of course it can. Twitter’s foundation is strong. It has 240 million users worldwide, and even broader brand recognition. Plus, many influencers and thought leaders use the platform. Twitter needs to do two different things. First, it needs to show that its ads have value: that they drive awareness, and conversions for the companies who pay for them. More importantly, Twitter needs to work hard to drive user engagement. Many Twitter users have accounts but never post. They treat Twitter like a newsfeed — they follow influential tweeters they like to see what they have to say, but they seldom post anything themselves. Twitter needs to let these users feel like they have skin in the game. They need to feel like they have a reason to share their own content. If Twitter can encourage its inactive users to create and curate content, it can make sure that the platform stays vibrant and culturally important for years to come.

Looking for more Twitter advice? check out our social media guides and posts.