Growth5 Blog

Thursday, July 2, 2009

Users Equal Revenue; Viewers - Not So Much...What does this mean for Twitter?

At one time delivering eyeballs was all you needed. Online advertising revenue paid the bills. Now, you need users. People who will use your product every day. You can can put revenue possibilities in front of these users. Viewers are harder to get money from because they expect the web to be free.

This is why Facebook has great potential with its users and Twitter as it is currently configured does not with its viewers. Eventually, someone will buy Twitter and try to turn its viewers into users.

Awhile back we wrote about the first social networking to reach a billion dollars in annual revenue - China's Tencent - who built their social network experience / activity around small purchases as eyeball revenue was never that big in China.

Facebook should be able deliver small purchase opportunities to its community. From the Facebook site:
1. More than 200 million active users

2. More than 100 million users log on to Facebook at least once each day

3. More than 5 billion minutes are spent on Facebook each day (worldwide)

4. More than 1 billion pieces of content (web links, news stories, blog posts, notes, photos, etc.) shared each week

5. Every month, more than 70% of Facebook users engage with Platform applications
This is an active bunch.

Twitter will need to turn its viewers into users. If most of Twitter's "users" don't use the service, are they users? Ars Technica contemplates the question of "what makes a Twitter user a user" in this article. Some highlights:
1. The microblogging service has grown exponentially over the last year, but a little more than half of its users have never sent a single tweet, according to the latest report from HubSpot (PDF)

2. According to HubSpot's analysis of Twitter's 4.5 million accounts, 54.9 percent of users have never tweeted and 52.7 have no followers whatsoever.

3. HubSpot's data supports findings from Hitwise in 2007 saying that a large majority of Web users like to sit on the sidelines, especially when it comes to user-generated content. At that time, Hitwise said that only 0.16 percent of YouTube's total traffic was made up of users who uploaded videos; the same applied to photo sharing site Flickr (0.2 percent), and even Wikipedia remained relatively low with only 4.59 percent of users being active participants.
YouTube, Flickr and Wikipedia are very popular sites with lots of viewers; they will need more users to be profitable.

Related: Slate put together this article on people who signed up with Twitter, posted once, then never returned - dubbing the posts Orphaned Tweets.

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