There was a time when Twitter looked like it could become as mainstream as Facebook, Yahoo and Google are now and America Online was back in the 1990s.
Photo: All Things D, Gawker Media
It’s time to lower our expectations.Three reasons:
- Investors already have. In the year between June 2008 and May 2009, startup investors plowed $21.6 million over 11 deals into pure play Twitter startups, according to a report from CB Insights. During the same period between 2009 and 2010, VCs put just $10.4 million into 10 deals. Since the number of deals remained the same, but the level of investment came down, we can surmise that investors believe there is still an opportunity investing in the Twitter world – but a smaller one. Why? See…
- Twitter isn’t going mainstream – not the way Facebook has. Gawker Media says that while Facebook has turned into a huge source of traffic referrals over the past year or so, Twitter adoption among Gawker readers has been slow and flattish. Jonah Peretti of Buzz Feed, best known for cofounding the Huffington Post, tells us StumbleUpon is a bigger source of viral traffic for the 150 million or so uniques touching the media properties his company has partnered with.
- Twitter is hostile to app-makers. It makes Twitter execs, investors, and PR angry when we say this, but it’s true: Twitter keeps proving to the people who make third-party applications and clients for the service that it will clone, squash, and co-opt them when it feels like it needs to. Twitter has also been particularly vicious – some say personal – in its dealings with TweetUp (now called PostUp), a startup that is trying to make money off the Twitter platform. (If Twitter were smart, it would allow PostUp to figure out how to make money off Twitter and THEN steal the idea and squash it.) This hostility is bad for Twitter, because in the absence of any real product-making talent at Twitter itself, third-parties have built all the popular and useful ways normal people like to use the service.
The good news for Twitter is that there is one simple way it can dismiss these worries: Pull a Facebook and start making cash hand-over-fist. People say the ads Twitter serves against its trending topics are very effective, so maybe there’s light at the end of the tunnel. If so, and Twitter starts turning in hundreds of millions of dollars in revenues on hundreds of millions of niche users, nobody will care if it’s going “mainstream.”