Twitter

 Image credit: Andreas Eldh

I spend a considerable amount of time every night reading through the various blogs I subscribe to. I do this for several reasons:

1. It helps me wind the day down
2. I’m an information junkie
3. It helps me stay on top of what’s current in the digital and social space.

Most nights, it’s easy to see what the big story is as it keeps reappearing in every feed. There were two big stories yesterday: the announcement of the cast for the new Star Wars movie and Twitter’s earning’s report. I should make it clear now that I’ve never been a Star Wars fan. (No, I will not give up my geek badge.)

The Twitter story piqued my interest as it was clear that many analysts and observers felt the earning’s call was disappointing. The more I read, the more I thought to myself: is Twitter in trouble?

Thinking back over the last few months, it’s easy to see a pattern of panic and confusion from the company. When Twitter filed its IPO documentation in October of last year it listed its active user base at 218 million. Having over 200 million active users is nothing to balk at, unless of course, you’re comparing it to Facebook which had an average of 802 million active daily users in March of this year.

Twitter’s major problem has always been that it’s not mainstream enough. It doesn’t have the broad appeal that Facebook has, its core users are people who are interested in instant news and commentary. Twitter is most active when big events are occurring; things like the Olympics, the Oscars and the Grammy’s.

As Steve Kovach at Business Insider writes:

Unless you’re constantly checking it, it doesn’t make sense if you log off for a few hours. The stream is so instantaneous and in the moment that it’s not very useful for the casual user. It’s like jumping in the middle of a rapidly changing conversation without any context.

This may explain the report that was shared earlier this month which stated that 44% of Twitter accounts have never sent a tweet. While Twitter has no problems getting people to sign up, there’s clearly a problem in getting people to use the service. This could very well be due to the issue of it being seen as a utility that is best used when there is a major event happening and not a social sharing network like Facebook and Instagram.

What has Twitter been doing to attract and keep users? It’s introduced features and esthetics similar to its competitors. Instagram (owned by Facebook) is growing at an incredible rate. In 2013, Instagram gained 23 percent in active users. In fact, Instagram is growing faster than Twitter, Facebook and Pinterest combined. To compete with the photo-sharing app’s popularity, Twitter has introduced the ability to send a picture to a user via direct message as well as the option to attach up to 4 photos to a tweet and tag people in the photos.

Are the efforts paying off? Research company eMarketer recently released a report which showed that Instagram had surpassed Twitter’s monthly active mobile users in the US. What I found interesting about the report was the insight into the make-up of the two networks’ users. Twitter, which is four years older than Instagram, and it’s user base is showing signs of maturity. Twitter’s account holders tend to be of all ages, whereas Instagram is primarily used by millenials and Gen Xers.

Unlike Twitter, the photos shared on Instagram aren’t related to a particular event. Anyone can post a photo and share it across their network. Whether it gets liked and commented on right away doesn’t matter on Instagram; it’s not about being caught up in the activity of one major occurrence or trend. An Instagram users feed is a lot less hectic that a Twitter user’s timeline.

In an attempt to attract Facebook users, Twitter recently rolled out its new profile layout for web users — a layout that is very visual and something you’d see on Facebook or Google+. Similar to Facebook profiles, Twitter users now have a large cover photo, a larger profile photo and the option to pin tweets to the top of their timelines. The new layouts have only been available to all users for a few weeks so it’s still too early to tell if they will lead to an increase in sign-ups and tweets being sent by users.

During its second earnings report as a public company yesterday, Twitter announced that it doubled its quarterly revenue to $250 million. However, the key metric – active users – failed to impress investors and analysts. Membership reached 255 million in the first quarter, but year-over-year sign-up growth slowed to 25 percent from 30 percent in Q4 2013. Not surprisingly, Twitter shares plunged in after-hours trading.

So what’s a maturing social network with growth problems to do? Imitating the competition will only go so far. Will acquisitions like Gnip help with the monetization of its own content? Advertising revenue will be crucial to Twitter’s future, but if the growth isn’t there, one has to wonder how exactly Twitter will be able to leverage advertising to expand the company.

As an active Twitter user, I can understand the frustration that comes with a fast-paced timeline. I use lists and columns in Tweetdeck to keep things organized and tp help prevent myself from feeling inundated. Then again, I’m definitely one of the core users – a news and information junkie. Are there enough people like me out there to see Twitter through this rough patch? Or are we on the cusp of seeing Twitter enter into a decline?

The next quarterly report will speak volumes.