The Potential And Pitfalls Of Twitter’s Mobile Business - OTHERS NEWS

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Sunday, October 6, 2013

The Potential And Pitfalls Of Twitter’s Mobile Business

Twitter has millions of monthly users, growing revenue, brand awareness, a propensity for breaking news, and data ripe for mining. Adding to this, Twitter’s main feed allows advertisers and media outlets to grab users’ eyeballs in a time when so many are looking away from the big screens in their living rooms to the small screens in their laps. But Twitter also has a growth problem, which potentially limits the extent of what it hopes to accomplish, and the revenue it could earn.
Twitter’s problem and its potential lie in its mobile nature.
On Thursday, the company revealed a steadily rising user base, 138 million monthly actives in March 2012, going to 218 million now75% of whom are mobile. But its sequential growth from quarter to quarter has been declining. 18% growth in monthly actives as of March 2012, followed by quarters where growth fell between 9% and 11%, to finally just 7% growth in June 2013.

MOBILE-FIRST FROM DAY ONE

Twitter was, in its own way, a mobile-first company before such a buzzword even existed. Launched firmly in the midst of the “Web 2.0″ era, where social networks weren’t established destinations, but more experimental new ways of connecting people with each other through the power of ever-faster internet connections, Twitter – or “Twttr” as it was known at the time – began as a website where you could post and view messages, and turn on or off text messages from others.
In July 2006, TechCrunch founder Michael Arrington referred to it as “sort of a ‘group send’ SMS application.” Oddly enough, that description still fits, over half a decade later. Sure, it’s no longerjust about sending text-like messages – but today’s Twitter is a lot like how SMS itself could have evolved over the years, had the mobile carriers innovated on the technology instead of sitting back and letting the dollars flow in as users bumped up their messaging plans. Consumers messaged more and more, moving to ever-pricier unlimited plans, and then, even those plans weren’t enough. Messaging became a real-time flow, and one that converged with the rest of the web, with all its links, photos and videos, and other media.
Twitter, meanwhile, with its SMS-like origins – 140-character lengths were a nod to the worldwide standard length of SMS at 160-characters, but shorter to allow room for 20-character usernames – was
poised to fill in the gap.
What if, sometimes, your messaging didn’t have to be quite so private, but rather a way to reach a wider community of friends, colleagues, or like-minded peers? What if you could feel like you were messaging with people as famous as Britney or Bieber or as important as the President or Pope? What if you could be alerted to the most recent, most interesting thing that’s happening in the world (or just in your world), with a buzz of your phone?
That was Twitter. That is Twitter.

THE COMPETITION

But Twitter isn’t alone in forging this path, and that’s a potentially large problem for it to overcome. In some regions, mobile competitors, and other services like China’s Sina Weibo, are enough of a threat for Twitter to detail that in its newly released S-1 filing as a concern which could slow its usage and its revenue in international markets. One could argue that such competition has already slowed its growth.
Here in the U.S., Twitter’s home base, smartphone adoption is nearly at its saturation point – meaning everyone who wants a smartphone pretty much has one. But they don’t all have a Twitter account, and when you ask around, many are still not convinced they need to.
For those who do, they don’t have to choose only between old-fashioned SMS and Twitter’s evolutionary service which took the idea of group texting into the internet age. They also have friends to message on Facebook, or Apple’s iMessage, or yes, plain ol’, can’t-be-killed SMS. And they have a plethora of new apps where they can communicate in ways Twitter didn’t envision.
Younger mobile users are sharing falsely-aged photos on Instagram (150 million users), or posting private, evaporatingmessages on Snapchat (est. 8+ million users). And beyond the U.S., other messaging apps have just as much, if not more, hold than Twitter. Whatsapp (300 million users), LINE (230 million users), KakaoTalk (100+ million users), WeChat (with Weixin, 235.8+ million users), Tango (150 million users), ChatOn (100 million users), and many others, have sizable user bases of their own – though, to be clear, they tend to report member numbers, not monthly actives.
That’s not to say that users will only adopt just the one mobile messaging-like app, and if they’re using X, they won’t use Y. Neither communications, social networking, or messaging are zero-sum games. But every minute someone spends drawing mustaches on disposable photos in Snapchat, or posting to a service that’s more popular with their own local group of friends, is a minute they’re not on Twitter.

THE MOBILE DISTRACTION

Elsewhere on mobile – a place Twitter has dubbed “the primary driver of our business” – we’re closing in on a million mobile apps to choose from. In the U.S. today, users with a few minutes to spare aren’t necessarily tweeting, they’re browsing Facebook (18% of the time) and playing games (32% of the time). Twitter, meanwhile, is fighting for a slice of the 6% of the time spent “social networking”…outside of Facebook. What Twitter has going for it is that it’s one of the few third-party social services deeply integrated into Apple’s mobile operating system, which will allow it to pull people back into its app in different ways than those that are not. Throughout the rest of the world, these percentages of time spent may differ but the overall trends are the same. Users are web surfing, socializing, reading, gaming and communicating on mobile at the expense of traditional media, like reading print media and watching TV.
So it’s a very good thing that Twitter is building a growing business on mobile, even if, with TV, it’s tying ad revenue to one of the businesses that’s declining because of it. But we have to also acknowledge that what constitutes a successful mobile business may end up looking very different from those built for the web.
Mobile is personal, intimate, consumed in smaller chunks, and yet also real-time – we’re flipping between apps as fast as we once mashed buttons on beat-up remote controls. Twitter’s draw is that it is, at once, all these things. It’s the idea of SMS, modernized and personalized. Its bite-sized updates are ideal for consuming in stolen handfuls of minutes, and its content seems almost ephemeral with the speed with which it passes and is then forgotten. Twitter is not just a business going mobile, it’s infused with a mobile spirit. And that certainly gives it a head start over some, but it doesn’t guarantee a win.

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