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Despite the return of its prodigal son and founder Jack Dorsey to the position of CEO, and the good news story of said same man returning $180m of shares to employees in the company, the value of Twitter shares have been on a slow downward decline in recent months.

So what might be going wrong?

On the face of it it seems like a great company.

I can’t think of any other medium that has changed not just the method of communication but also the format. It is brilliant at providing inspiration and connecting people and conversations.

It recently added 4 million new users (up 11%). It has 320 million active users, and has 90% brand recognition amongst the general population. 90%…For a company that is still less than 10 years old. That is astonishing.

And in some ways that might be the start of the problem. Your gran has probably heard of Twitter. It gets mentioned in news reports daily, hash tags appear on billboards and TV shows, ‘@‘ handles are pushed out by virtually every media outlet and brand.

It’s recognition is ubiquitous, but its users aren’t. Only a fifth of the UK population is on twitter. Five percent of users account for 75% of all activity. And a third of all tweets made by the most active Twitter users were generated by machine bots, (in other words automated)

From an investor point of view this is bad news. It’s a bit like thinking you are buying shares in Cocoa Cola and instead getting Irn Bru. It’s got the fame, (at least in the UK), but its an acquired taste for a specific section of the population.

And therein lies another of its main problems, its not Facebook. My mother in law is on Facebook. She’s not on Twitter. Facebook has the brand AND the users. Nearly a fifth of the worlds population, thats near enough 1 billion people use Facebook daily. It is ubiquitous in brand and usage.

Facebook is an everyday tool. From sharing family and friend photos, to organising events, messaging, inspiration, special interests, it does enough of lots of things well enough to keep most of us interested and coming back. Twitter suffers in comparison.

Twitter is also good at following special interests, (work or play).

Though ironically, it is not very good at one of its main functions – a news feed. Follow a relatively small number of people, and it has a blink and you’ve missed it news feed, meaning most content never sees the light of day. (I hate to think of the millions of pounds of brand generated content that is wasted this way).

It is good at following events. Want to see what other people are saying about the latest contestant on X-Factor? Follow the hashtag theme. The same with news events, from trade shows to the Arab spring there is probably no more up to date account of what is going on.

It has also found a rather interesting niche – customer service. Public pronouncements of your displeasure over a product or service has meant more and more companies clambering for a quick resolution. Though the downside of this is that it doesn’t make for great content for everyone else.

Its also not that brilliant at engagement. Looking recently at a report of the Twitter worlds of top marketing bods, peoples engagement with the posts (either mentions or retweets) is typically less than a 10th of one percent. Thats actually incredibly wasteful and doesn’t compare favourably with response mechanisms on other forms of media. It also undermines social medias one big USP over traditional media, that it is about interaction not broadcast. The truth is its mostly broadcast with occasional interaction.

So the point is unless you have to know what is happening right now, want to follow a small community, want to complain or have something to sell it’s probably not for you.

Its not everyday, and its not casual. Getting any traction takes lots of work. And critically, as a company, it doesn’t yet make any money.

So what to do? I think it has two choices. Accept its niche, reset expectations that its not Facebook, and focus on being a really good tool at one or more of the the things its already good at, or is about to invent. Or it needs to answer the mother in law question. What would make her create an account, and use it regularly?

It’s lost the photo space. Facebook and Instagram have already nailed that, and at the moment Twitter, despite its best efforts is not a very visual media. The same could be said for moving image, event organising, messaging, search, blogging etc. Those ships have passed.

One thing it could definitely be is a great news aggregator. Imagine if it could organise news headlines around your interests. My mother in law is Hungarian, so if for example there was an election there, she would value an instant selection of headlines from all the different news outlets and public posts, and would offer her a 360 degree perspective. It’s hashtag plus, without the bother of getting your head round hashtags.

Most people check in on the news in someway everyday, (even if its just the football results). And providing an overview is an area no one yet does really well, and plays to Twitters strength of organising information around topics. It could be a winner.

Whatever the future holds, one thing is for sure though. Twitter has been brilliant for man kind. It has helped make the world feel smaller and more connected. It has helped connect and galvanise protests, communities and revolutions. And its given us a lot of new insight and inspiration.

The truth is that it’s purpose may actually be more social than commercial, more Wikipedia and less Facebook. Though thats going to be very difficult to reconcile with its investors.

Even if its not Facebook, it has been a phenomenon, and I for one wish it well.

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