Is Twitter all talked-out?

Twitter has been dubbed the 'media darling' of the digital world. But who exactly are its 92 million users and will they stick around long enough for the company to make any money?

According to the latest comScore data, the micro-blogging social networking site has seen the number of new users slow in the past three months, with growth down by 8.1 per cent.

Are users simply over the hype of Twitter and if so, what is the future for an online pre-revenue business – it still hasn't made a profit, but promises to do so soon – that is yet to create a sustainable business model?

Twitter launched in March 2006, two years after the social network that started them all, Facebook, which launched in March 2004. It's taken almost three years, but the site now has more than 92 million users worldwide.

To put that in perspective, radio took 38 years to reach just half the amount of current Twitter users – 50 million. TV took 13 years and the internet, four.

Social networking isn't just a fad. Social media experts Socialnomics says "it is fundamentally changing the way we communicate”, and as Paul Budde, Business Spectator's telecommunications blogger, says "it is the key to our digital economy”.

However, some skeptics suspect that Twitter has peaked, which may offer an explanation the decision by company cofounder, Biz Stone, to tout an initial public offering this week. Stone has also said the company will launch 'paid accounts' for businesses in 2010, the year he has dubbed Twitter's "revenue year".

But is could be too late. Post-GFC investors will be worried about making the same mistakes of the late 1990s by investing in companies that have yet to generate any revenue, but that promise to do so within timeframes that would make many offline businesses look highly suspect.

However, a number of major advertisers and brands have used Twitter as a way of communicating directly with their customers for free – using 140 characters or less to post updates about company moves such as product launches and new campaigns.

But not only are new users down, Nielsen data reveals that traffic to Twitter was down 27 per cent during September and October – a statistic that might cause businesses to think twice about investing in future 'paid accounts'.

On the other hand, the site is considering signing further deals with companies to licence its content and live streams, just as it did recently with Yahoo, Google and Microsoft's Bing, that will add to its revenues. However, there are signs that the relationship between search engines and 'content providers' is changing fundamentally, as newspapers consider backing Google's challengers to break its stranglehold on the search market (Murdoch gains on Google, November 23). This could make Twitter's move to monetise content much more difficult.

The most important point of business that Twitter should be focusing on at the moment is how to retain its current users. This is the only way they can make any real money, as it is the users that create all of the site's marketable content.

As it is, only 10 per cent of Twitter users accounted for 90 per cent of all tweets as of May 2009. A study from Harvard Business School confirms that the typical Twitter user tweets "very rarely", while the average number of tweets per user over a lifetime is just one.

So, despite all the media attention, many are wondering what the future holds for Twitter.

Despite the revolutionary beginnings for social media – some 96 per cent of Gen Ys belong to at least one network – no one seems very compelled to stick around. No wonder Stone is looking to cash in now while people are still talking about it.