How Twitter could be worth nothing in a year

Silicon Alley Insider on Monday wrote that it believes Twitter could be worth "a billion dollars" in one year as long as it "takes full advantage of (its) messaging platform, user base, and user disposition to lead in the P2P mobile payments space, where, despite years of hype, no one has much of a head start."

After reading through the piece, it had me thinking: what if Twitter isn't worth "billions" in one year and instead, it's worth nothing? Just because it has a huge user base and it may be able to take advantage of its messaging platform, can we simply forget that it's down every single day for extended periods of time? Can we simply forget that important features like "replies" are disabled for days at a time because "Twitter is stressing out"?

Twitter may be a destination for millions of people and a great place for self-indulged "Internet celebrities" to massage their egos as more and more people follow them, but it's a poorly designed site with huge stability issues and enough downtime that people are becoming more and more likely to jump ship and join services like FriendFeed and maybe even Jaiku.

It may be difficult to believe such a popular site could be worth nothing in a year, but the way I see it, it's certainly more likely than Twitter being worth $1 billion in that time.

How much longer are we really willing to stand by and let Twitter's downtime ruin our experience before we move on? According to the Royal Pingdom, Twitter downtime last year was almost six days and in December 2007, it was at its worst point in four months--10 hours, 59 minutes.

Of course, Twitter knows there's trouble afoot. In the past two months alone, the company has issued a handful of posts on its blog explaining why Twitter was down for one reason or another, or why replies stopped working for a few days. And while I applaud the company on its open line of communication, why can't it start figuring things out and stop wasting our time with the same old line of excuses?

Some say its new round of funding will help. According to the company, Twitter has received an additional $15 million in funds and will use this money to stabilize the product and create a more compelling service. But I'm not so sure the train hasn't already left the station.

In the past week alone, when replies were lost and people were obviously upset with its performance, my in-box was inundated with FriendFeed subscriptions, indicating some people have finally seen the light and decided that a service that makes a big deal out of being live for 24 hours isn't the best place to be.

There's a huge attraction level to Twitter. According to most estimates, the average person writes 15 tweets per day and updates many more times than that to see what their friends are up to. But at what point does that well dry up and people see this service for what it really is: something that people really like, but due to its downtime and disabled features, is becoming nothing more than a frustrating and unreliable waste of space.

If Twitter doesn't turn things around, it'll be worth nothing in a year. The way I see it, the company's huge user base is starting to lose interest and find other services (like FriendFeed) that offer similar functionality, but have the kind of reliability we're all looking for in online services.

In order to turn things around, Twitter needs to spend considerable cash on stabilizing the site and making sure that it'll survive when people want to Tweet back and forth during a Steve Jobs keynote and handle the stress during daily use. If it can't do that within the next few months, a mass exodus will surely happen and people will find other services to spend time on. And in the process, this once valuable company that was worthy of $15 million in funding, will be worth nothing in no time.

It's time to wake up and get to work, Twitter. Your users are losing patience and unless you want to see them all move to FriendFeed, you better get to work before it's too late. Trust me, time is running out.

In the meantime, feel free to follow Don on Twitter, FriendFeed, and Facebook.

[dmohney]

For goodness sakes!

Hasn't EVERYONE run into growing pains issue over the years? AOL, Amazon, UUNet, oh and I'm not even breaking a sweat yet trying to think of fast-growing service/network companies that have run into the hard wall before they spend some VC bucks to get back on track.

How many days did Skype and RIM go crater, and they HAVE revenue?

Lighten up.

[gefitz]

True, there are a few companies around now that grew into behemoths despite some early twitchiness. But for every Amazon, there's twenty "can't miss" online businesses that slowly disappeared or spectacularly imploded upon their much-too-quick expansion.

If Twitter continues the way it has, and especially with the VC market shrinking they way the rest of the economy is, they'll find it much harder to explain why they're worth the investment...

[ss_Whiplash]

I don't use Twitter but listening to the complaints about system stability I really thought you were talking about MySpace for a second. Sometimes I think the buzzword "Web 2.0" signifies poor architecture and planning more than it does social networking.

[jerquiaga]

Are we seriously whining about SIX DAYS of downtime? Out of an entire year!?! That's 1.6% downtime. I know the gold standard is 99.999 whatever, but seriously, for a product that has seen tremendous growth in the last year, you'd think we could cut them a little slack. Grow an attention span people.

[whosafraid]

Twitter is a free service. To me, that means we don't have any right to complain about downtime that is due to heavy usage. If they charged or took advertisers, that would be a whole different story. I agree that it is not designed well, but again, it's not like I'm paying top dollar for this completely superfluous service.

[sonicsrini]

I think you see Twitter as an infrastructure play, and of course reliability is a key part of that.

I simply see Twitter as a publishing play. I think the majority of early adopters will think, "ooo, a quick status feed for my friends, nice." This is micro-publishing and it is why Twitter is going to cross the chasm; early adopters like this writer have many other options, but the masses will lock into one centralized way to do this quick, fun, ambient, continuous and ultimately important task.

Sure this is infrastructure, and downtime impacts this, but for most people Twitter publishing is a tiny exercise in fun, a way to keep in touch with people you barely and quickly met at some convention over a long period of time. It isn't some major system they've created for themselves. It's the "fun" angle of Twitter - which is reliant on the simplicity of the app, deftly balanced by a whirlwind of developer interest - that will keep people coming back.

On one level, it comes down to brand. I think the twitter brand will work, just like Ev's "blogger" brand worked. Couple that with solid leadership and venture capital and they will proliferate. Now will they make money? That remains to be seen: I personally am not so into buying stuff that I'd want my friends to constantly be tweeting stuff to buy at me. I think that is not inherently a winner as the "billion dollar" guy seemed to think it was.

The winning strategy for twitter seems to me to be IDENTITY/PRESENCE. A person's tweet-stream is the best reflection of that person's identity anywhere. It's more compact than some social-networking profile. There is an opportunity to create a "metaprofile" for a given user that applies to any site they visit or see. From this perspective, Twitter should do its best to have a person's twitter-stream be a part of their presence on any social network they may join. The implication would then be, "on the internet, you're nobody unless you Twitter". A new user on the Internet quickly gets hip to a small circle of functions, from setting up an email address to getting linked into social networks etc. Such a brand identity would become part of the generic "startup sequence" for new Internet users and make non-Twitters online now feel naked without it.

We at METANOTES believe that this identity is going to be core to our users' being able to create ongoing status-based profiles of themselves, and we're setting up our system so that you can roll over a user's name and see their last ten tweets (assuming they've set up twitter, but we'll encourage them to do so when they register). It becomes in our startup's best interest to register our new users into Twitter as well. Whereas Friendfeed seems intent on hijacking the conversation, Twitter's just a big old graffiti wall which only your friends can read. It's the Ramones-style simplicity that will alienate more sophisticated early adopter types, but will ring true with almost everyone else (heck, it's easier than email!)

Any e-commerce operation that wants to access a mainstream audience would do well to augment their company blog with a twitter feed and get every one of their readers/customers to really use it. Twitter is so much cooler than a listblast it isn't even funny. And THAT might be your billion-dollar valuation model - replace the whole autoresponder-listblast industry with an intimate customer contact solution that lets recipients network among themselves ? Twitter would simply have to frame a solution that mimics that of iContact or aWeber, and could charge per subscriber for something so valuable.

- Srini Kumar
CEO
MetaNotes.com

[cporpheus]

Twitter needs to fix its infrastructure or its users will go to something else. We're fickle that way.

[zach-znh]

Twitter's downtime really should be unacceptable. When I read the SAI article I really just laughed it off because over the last few months I've watched hoards of power users disappear from my twitter stream.

Growing pains? Twitter is many years old. Users can't complain because it's free? Google is free and people would absolutely lose it if one of big G's services went down.

But the reason people get so frustrated when Twitter doesn't work (which has been in limited functionality for weeks, by the way) because it really is an awesome service. Competitors have come along (plurk, I'm talking about you) but many are staying with Twitter due to its simplicity and (supposed) functionality.

Ultimately - I agree with both stories: If Twitter can get its act together soon it will be ok, but if it can't it will keep bleeding users until it becomes valueless.

If you want to debate this more, I'm @znh - Twitter seems like an appropriate venue for this conversation...

[daylightgambler]

Although new to social media, I find sites like Friendfeed and Jaiku to be very different to Twitter and I am not even really tempted to switch over to Plurk. Ultimately however, I will only stick with Twitter as long as the people I follow stick with Twitter.

[jgoodwin3]

A Billion dollars is a hell of a lot of incentive to eat someone else's lunch.

[ognen93]

It's even worse when you have a Twitter and noone follows you and you just keep writing for yourself haha :D

[Aelwrath]

"The way I see it..."

Ah, Don's favorite quote!