Back in early February (2009), there was a very worthy piece by George Packer in the New Yorker, “The Ponzi State” (it’s behind a registration wall, I’m sad to report). The gist of Packer’s piece was that economic growth in Florida required a constant influx of new people. With very few underlying industries or major businesses, many in the state made their living selling houses or building them. As long as there was a constant influx of new people with money in their pockets to buy those houses, everyone was happy. House prices went up, more people moved to Florida to buy houses thinking prices would continue to go up, many of them got jobs selling or building more new houses, and so on.
Then everything came crashing down in 2007. Without that constant influx of new people, turns out there was no “there, there.”
That article has been rumbling around the back of my head as I’ve watched the hyper-explosion of Twitter the past couple of months. I’ve been wondering: is Twitter’s growth driven by some underlying fundamental benefit it provides? Or, is it like Florida — dependent on a constant influx of new people to the service? And if the latter, what happens when the growth peters out? Is all this growth and hype just inflating a big “Twitter Bubble?”
I think the answer is yes. And I realize that writing this is complete and utter heresy in the current moment. Hear me out.
I admire Twitter as web craft. It is very, very nicely made. But in general, how much value does a series of 140-character messages really provide? Go look at the feeds for any of the top 100 or 200 Twitterers. How much value is really there? Look hard at your feed for a day — how essential was it to get those Tweets in real-time, really?
At the very, very best, I think you have to conclude the jury is out. At the very worst, it’s a big, stinking, very perishable pile of inanity — mostly crap, with a very short shelf-life.
So why the hype? Traffic. People — bloggers especially, those in Silicon Valley or the tech industry even more particularly — have realized that Twittering can send traffic. This is why Jason Calacanis offered $250,000 for one of the 20 recommended user slots on Twitter. It’s why so many top twitterers include links in their tweets, usually to their own properties. And why so many in the SEO/SEM business have flocked to use Twitter.
So it’s all good, right? Twitter is the new Google, a new fountain of traffic for web properties? That depends on how you look at it, and whether you think Twitter provides some essential, fundamental value. If you question whether it provides much value other than the potential to drive you traffic, the Florida real estate cum ponzi scheme analogy goes like this: people are flocking to Twitter mostly because they believe it has the potential to drive traffic, and as long as people flock in that perception is fulfilled.
The problems start occuring when the growth slows down, or stops.
And this movie, we’ve seen it before. Digg and Facebook got the same (ok, not quite the same) levels of hype in their days of ascendancy, for the same reasons. People thought they could be tamed, harnessed, used as traffic hoses. As growth (or the perception of growth) in traffic from those services decreased, so to did the hype attendant on them decrease, at least among the digerati. But unlike Twitter, one could argue Facebook, and to a lesser extent Digg, provided some more meaningful, underlying value to their end users.
In short, I think it’s arguable there is a Twitter bubble now, just as there was Florida real estate bubble in the early 2000s. It’s being propped up by perception of future, unending growth. A lot of people joining because they believe in the dream — that they can gain a lot of followers, and turn those followers into dependable “viewers” or “buyers” or “believers” or whatever. And instead of real estate agents, we have “social media consultants,” SEO folks, web designers, entrepreneurs, politicians, and celebrities pitching themselves, or their links. In short, it’s a few million people furiously on the make.
That’s not to say Twitter is worthless, that it has no value. The value is exactly what you’d expect a steady diet of 140-character messages would provide.
Rather, just like Florida real estate at the height of the bubble (and Facebook two years ago), the value is a lot less than we currently perceive. It’s not the next Google. Heck, it’s not even the next YouTube (a company, it turns out, that was underhyped!).
And that the crash might be a hard one.