Last summer, we noted that one of Twitter’s big challenges was its failure to “go mainstream” in the United States, especially relative to Facebook.
Despite the enormous popularity of the service among tech-and-media folk, Twitter’s growth among mainstream consumers had been weak. This assessment was recently confirmed by a Pew study that found that only 8% of American adults use Twitter.
Well, as Erick Schonfeld of TechCrunch notes, this problem appears to only be getting worse, not better. According to Comscore (here) and Compete (below), Twitter’s U.S. user base peaked in July, and since then has flattened or even dropped:
Meanwhile, Facebook continues to grow, and the gap between the two services continues to expand:
But isn’t Twitter still growing like a weed?
Yes–but only outside the US. And unless there’s something special about what’s going on in the US versus what’s going on internationally (which there may be), the US slowdown may repeat itself internationally once Twitter hits a base level of penetration.
And what does all this mean?
First, it means that unless Twitter can find a way to re-accelerate domestic growth, its revenue opportunity may be significantly more limited than many people expect. Right now, as Erick Schonfeld notes, Twitter is smaller than the Huffington Post. The Huffington Post is valued at about $250 million, while Twitter is valued at $4 billion (and Huffpo, arguably, has better ad inventory). And although Twitter’s amazing international growth will help, international advertising revenue per user is much lower (across all forms of advertising) than it is in the US.
Second, it’s likely that part of the thinking of Twitter’s board in promoting Dick Costolo to CEO and making other management changes was to address this and the monetization issue. If Twitter can’t figure out how to penetrate the mass market, it will end up being a big disappointment relative to its potential of a year or so ago. A core part of Dick’s mission, presumably, is to fix that.
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