Nielsen Online – Twitter User Retention 50% Less Than Facebook & mySpace

One blog post that really gathered a lot of attention last week was a report released from Nielsen Online, a branch of the Nielsen company that is famous for its TV ratings system. The study, published by Nielsen VP David Martin, suggests that over 60% of all new Twitter users quit the service after one month, and that this retention rate will hinder the service in gaining a mass audience. By comparison, Facebook and mySpace boasted user retention rates over double those of Twitter during their explosive, high growth periods, and enjoy user retention rates of around 70%.

“Currently, more than 60 percent of U.S. Twitter users fail to return the following month, or in other words, Twitter’s audience retention rate, or the percentage of a given month’s users who come back the following month, is currently about 40 percent. For most of the past 12 months, pre-Oprah, Twitter has languished below 30 percent retention… 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.”

The summary offered by the authors of the study is simply, “Twitter has enjoyed a nice ride over the last few months, but it will not be able to sustain its meteoric rise without establishing a higher level of user loyalty.” Some have related this to similar studies published about Second Life, which also enjoyed a wave of massive media hype spurring new users to register, many of whom soon quit or never visited the service again. Do or could some of these same users quit over time, rejoin under different names or accounts, or migrate to third party Twitter apps that mange their message stream on the service? Sure, but more users are sticking with mySpace and Facebook.

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mySpace Founders Forced Out on Executive Pay & Culture Clash

Another scoop for TechCrunch, who reported over 24 hours before AP, the Wall Street Journal, and Reuters on the breaking story that mySpace co-founders Chris DeWolfe and Tom Anderson are being ousted from top management positions at the company and will likely step down. Though their contracts were not due to expire until later this year, the pair were earning $30 million USD per year at News Corp. A look at the forthcoming changes and the deeper reasons leading to the break points to serious trouble at mySpace.

“MySpace CEO Chris DeWolfe and News Corporation’s Chief Digital Officer Jonathan Miller, announced today that, by mutual agreement, Mr. DeWolfe will not be renewing his contract and will be stepping down in the near future. Mr. DeWolfe will continue to serve on the board of MySpace China and will be a strategic advisor to the Company. Additionally, Mr. Miller announced that he was in discussions with Tom Anderson, MySpace’s president, about Mr. Anderson assuming a new role in the organization. “

“The company did not immediately name a replacement, and a company spokesperson declined to comment, but some speculate that former Facebook COO Owen Van Natta is a leading candidate.”

According to traffic statistics, mySpace is still the largest social network in the US, but was down in membership overall 4% on the year, while US membership for Facebook rose 78% in March alone. Typically, founders leaving a site after a sell out to a corporate conglomerate means that the site is surely losing its original message, community, spirit, and philosophy. Huge changes have come to the site with the relaunch of mySpace Music; for underground pop and hip hop networking, promotion, clubs, concerts, and the like, mySpace is still the undisputed champion. Yet as it becomes a platform for mass, mainstream, commercialized music and video distribution, maybe Anderson and DeWolfe weren’t the best point men for the job.

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