What Twitter’s Massive Traffic Growth Slowdown Means For Us All

Twitter’s user growth went from bad to worse in December, declining to a phenomenally anemic 3.4% rise in new users.

Everyone and their blog is trying to make sense of just what this means. Of course, it is important to recall that @Ev stated recently that Twitter is hitting new usage highs before we all get our panties tangled; what does this all mean?

I firmly believe that Twitter is only useful because it hit a user critical mass. Twitter in and of itself has nearly zero value. FriendFeed was always better at importing feeds of content, but Twitter won the day because people flocked to it. Twitter touched a nerve in global society in all the right ways.

But now Twitter is struggling to find its old growth. The service is still growing, and is bigger than it has ever been. However what happens in the next few months is what will decide if we are still using Twitter in a years time. Facebook is the elephant in this room. Call it the war of the two US-based social networking titans.

The dilemma with Twitter’s growth completely running out of gas is that Facebook is having no such problems. Even if Facebook saw a 50% decline in its growth, it would still be a large multiple of Twitter’s monthly new user accretions. A very large multiple.

Recall that Facebook was adding hundred of thousands of new users daily recently. We have no reason to think that that has changed. In the United States Facebook is hardly hurting, adding some four million unique users in December alone. Factor in international growth, and Facebook could have grown by ten million uniqes total.

It seems that finally Facebook’s user momentum and constant addition of Twitter features to its vast audience is hurting its smaller rival. In the middle of 2009, when Twitter seemed to be a bullet the no one could stop, Facebook began to copy features that users loved on Twitter. We just saw them add in a retweet capability, and Facebook does not seem to want to give the copy machine.

Taking all that into consideration, where are we headed? With the Twitterification of Facebook continuing, either Twitter innovates in its system, expanding its capabilities to match the Facebook threat, or they continue to lose the traffic and new user war to Facebook. Their growth remains poor or Twitter begins to lose users.

A 3.4% growth rate is dangerously close to a negative one, especially when it dropped three percent in the last month. One more bad month, and Twitter is, for the first time, shrinking. The chart that HubSpot prepared says it all quite plainly:

Facebook of course with huge expanding revenues can continue to expand its product, allowing it to replicate anything that Twitter adds, and more without breaking a sweat. I hate to say it, and it is the first time that I have ever done so, but Twitter’s future looks choppy. It is hardly without strengths, it has a fanatical userbase, and corporations are adopting it right and left. But the same goes for Facebook, and Twitter is not the market leader.

My prediction for three months for now is that Facebook continues its massive growth, and Twitter grows just a little. If that does come to pass, look for Twitter to begin its decline. Hell, they never even could figure out how to keep the service online.