Twitter Is Killing Itself In Order To Grow And Please Wall Street

Dick Costolo (Photo credit: Wikipedia)

In case you missed it, Twitter (TWTR) is having big problems as a public company.

They don't have a problem with their core product. Its users seem to adore it. And it's not a problem with making ad money from it. All indications are that that's going swimmingly.

The problem is that its executives are worried that not enough people use it. And, because of this, they feel external pressure - from

Wall Street - to increase the number of users it has how often people use that.

Since it was founded, Twitter has always been compared to Facebook (FB). Twitter's always been smaller but it's felt that they were more ideally situated to take advantage of the shift to mobile. Facebook was built in a PC era; Twitter was originally built to be an SMS app (later adapted to PCs). It had mobile flowing through its blood from birth.

But one of Facebook's - under-appreciated - geniuses has always been its mass appeal. It was so easy, even your mom and dad could use it. Combine that with a winner-take-all phenomenon which occurred at the end of the last decade when it dramatically expanded into basically all the geographies around the world and Facebook was able to very quickly get to over 1 billion users (now at 1.2 billion monthly active users).

Twitter has always had the ambition of growing to similarly large numbers of users, but their growth has really stalled out in the last

year at around 241 million users.

Just last week, it was reported that Instagram - now owned by Facebook - will surpass Twitter in users by the end of this year.

Twitter's growth flat line - which applies internationally as well as domestically - has created a crisis of confidence within the upper ranks of Twitter - especially since it's playing out in the first few months after the company held its IPO.

The reaction by Twitter seems to have been to broaden the appeal of the product to the masses. Grandma doesn't know what an '@' sign or a hashtag is, so let's try and make the product easier to use. Let's add photo-tagging. Let's add more frequent notifications that tell me two people I follow are having a conversation about the Academy Awards, so that maybe I'll join in.

As someone who joined Twitter in 2007 and use it at least 50x more than I use Facebook, the effects of all these Twitter product tweaks has been to water it down and make me less (not more) interested in using it.

Now, I'm not grandma. So maybe the calculus by CEO Dick Costolo and others is: who cares? Maybe they believe the Twitter die-hards like me will always use Twitter. This is all about onboarding the normals, come hell or high water.

These product tweaks won't make me likelier to use Facebook. But it will make me likelier to seek out what's next - probably through messaging apps.

I would argue that Twitter doesn't have a product problem or an ad problem. The company built a great product with a lot of appeal. The reality might be that there is a ceiling to the number of users who will use it.