Everyone is carrying on about the meteoric rise of Twitter following the recent race between Aston Kutcher and CNN for that magical one million follower number. Celebs and other well known people climbing on the Twitter bandwagon as if it is the greatest thing in their lives.

But, for as quickly as its numbers are rising one has to wonder if those numbers in anyway reflect the number of people sticking with the service.

Well according to the Nielsen Wire blog Twitter is suffering from some of the lowest retention numbers of social media services. Where services like Facebook and MySpace experience a 70 percent retention rate of new members Twitter is lucky if it can manage 30 percent. Only since the Oprah, Kutcher and CNN explosion has Twitter’s retention rate managed to reach 40 percent but there is nothing to suggest so far that we’ll see that number stick.

As Dave Martin, Nielsen Online Vice President, said in the post

By plotting the minimum retention rates for different Internet audience sizes, it is clear that a retention rate of 40 percent will limit a site’s growth to about a 10 percent reach figure. To be clear, a high retention rate doesn’t guarantee a massive audience, but it is a prerequisite. There simply aren’t enough new users to make up for defecting ones after a certain point.

I’ve always maintained, and still do, that sign up numbers actually mean very little. In most cases we are dealing with first blush popularity puffing up the numbers but in the cold light of day they have no lasting value. In this case Twitter might appear to be exploding across the landscape but beyond the initial flood of celebs and other glitterati just how many of them will still be around in a month, in six months or a year. Will the numbers still show the same type of growth at that point or will they settle down to the more realistic count of actual users.

[top graphic courtesy of CFO Strategist – graph courtesy of Nielsen Online]

Related posts:

1. Twitter In Trouble? I Smell Trolling At 100 Virtual Paces
2. Can we bitch slap this ego pimping of Twitter ‘numbers’ into oblivion – Please!
3. Oprah on Twitter: This Is What We Were Waiting For?

A lot of conversations having been going on since the email announcing that Pownce had been acquired by Six Apart. Of course the real news wasn’t the purchase so much but that the Pownce service was going to be shutdown in two weeks. As irritating as it might seem to have services that users invest time in building up get sold off that is part of the so-called social media user generated content world.

It’s all part of the game we play. Someone gets a cutesy idea for some service and slaps the code together after which we come along and fill it up. Then along comes some bigger company who thinks the idea has potential and buy it up.

The problem is that there is a part of this whole deal that stinks for the users. While in some cases the founders; and to a large degree VC funds, are gloating over their pay days the users are left wondering … what now?

Then there are those other startups that have chewed through whatever money they had only to end up in the deadpool. While those founders go on to other things once again the users are left wondering … why did I even bother?

It’s not like this is something new either. From when DodgeBall and Jotspot both got snagged by Google up to this latest so-called acquisition of Pownce by Six Apart we have seen many startups basically disappear. Either by purchase or by sinking into the depths of the deadpool our time and efforts have been rewarded with – nothing.

We are encouraged on an almost daily basis it seems to join up with social type sites and make our daily activities the backbone on which they hope to build a business. The cooler the better. The more users the better. The faster you can get them signed up and pumping data the quicker you might just get those VC dollars.

For what?

Just so a smaller and smaller group of people can have some sort of pay day down the road. Just so some javascript jockey can add Founder to their resume. Just so we can keep entering in the same old crap into just another variation of something you already belong to. Just so we can watch some other startup without a real business plan go tits up taking all our data with them.

Some how that doesn’t seem to be a good trade. Even with Twitter one has to wonder what will happen if it doesn’t come up with a real business plan other than being bought up. We have spent the last 2 to 3 years; depend on how much of an early adopter you are, pumping up the value of the service.

We have made it the mainstream service that it has become. So what happens if the day comes when there are no more VC dollars? What happens if that business plan they promise is coming turns out to be nothing more than hot air?

Like Aaron Brazell said today in a post

The same goes for Twitter, where people have made an entire consultation around the use of Twitter. But what happens when Twitter goes away (and Twitter will go away at some point, undeniably without consultation with these consultants building their business on its existence)?

What happens when you as a consultant are hired to provide surefire, highly effective social media routines that will have a 95% possibility for 3-6 month positive effect on the growth and you recommend Twitter? And Twitter becomes 80% unreliable for an entire month, as it did in June and July?

What happens in a dying economy when companies want real returns and all you can give them is conversations with potential clients, and you have no solid way to convert those conversations into real customers?

I play around with Twitter but I don’t plan on making it a real part of my daily computing and communication life. I use FriendFeed but I don’t expect it to really go anywhere. I insulate myself with this attitude because I am fed up with seeing all the effort and time people are putting into these so-called businesses only to see nothing of any value coming back.

As it is there isn’t a single social media service out there today that could stand on its own two feet if the VC dollars disappeared or  the ad dollars really tanked. It’s beginning to feel like this whole social media thing is nothing more than a fly by night exercise in living off of borrowed money and people need to be a part of group. No one is winning in this game – least of all the users.

Related posts:

1. The coming trust crisis in the social media expert space
2. Is Social Media Useful or just Ego-Boost?
3. Is social media becoming a social mess?