This month has seen a flurry of activity regarding Twitter’s growth rate. Does it really matter what Twitter’s growth rate is? Does it matter if Twitter ever gets close to the size of Facebook?

Only if they plan to monitize with advertising which they swore for years they wouldn’t do.

That is until November of last year:

Twitter COO: We’ll Have An Advertising Business Soon. And You’re Going To Love It.

Costolo was vague on the details, but he did make some promises: “It will be fascinating. Non-traditional. And people will love it… It’s going to be really cool.”

It’s going to have to be super fascinating and really, really cool for people to like it. Twitter users (the ones that are there for the community not the hype and buzz) hate advertising. Are even violently opposed to it. But we’ll see.

HubSpot recently reported that growth to Twitter has slowed. What this really means is that traffic to Twitter.com has slowed. The only people who use the Twitter.com interface to post tweets are usually new users. There are other administrative things the rest of us use Twitter.com for but once your account is set up you could never have to go back again.

Twitter’s Growth Slows Dramatically: ReadWriteWeb

Now, however, according to the latest data from HubSpot, Twitter’s growth is slowing dramatically. In October 2009, Twitter’s growth rate had fallen to 3.5%. On a positive note, though, the average active user on Twitter today is more engaged than six months ago.

Twitter growth slows while usage expands globally, report says | Social Business | ZDNet.com

On the flipside, the report states that Twitter users are more engaged than ever before.

In the seven months since we last examined the State of the Twittersphere, the average Twitter
account holder has become less of a newbie. The average user is following more people,
followed by more people and has posted more updates.

So while new Twitter users are slowing, engagement and usage on the site is going up. Are you using Twitter more? I know my usage has leveled off but I’ve been using it for years. Presumably in an effort to let the people know that Twitter is still *growing* rapidly (just not in new users) @ev posted that they had a record usage day.

Yesterday Was Twitter’s Highest Usage Day Ever. Today Will Be Bigger: TechCrunch

For several months now, all we’ve heard is how Twitter’s growth, once rapid, is flatlining. And all indications are from the various third-party measuring sources is that this is true. But Twitter co-founder Evan Williams just tweeted a little surprise for everyone today: Apparently, yesterday was Twitter’s highest-usage day ever. And today will be even bigger, he continues.

Why is all of this relevant/important? Because no matter how hard some companies try advertisers live and die by the CPM (Cost Per Thousand - M is the Roman numeral for thousand). Facebook advertising works because of the sheer number of people. It also helps they Facebook is continually trying to make advertising more relevant to you based on your network. This makes it less annoying but it’s still advertising.

Fred Wilson at A VC (an early investor in Twitter) posts about the growth of Twitter’s ecosystem (going as far as to call Facebook part of Twitter’s ecosystem) versus the growth of their site traffic.

Twitter.com vs The Twitter Ecosystem: A VC

So the links I put out into Twitter in the past 30 days generated almost 39,000 clicks. Nice. But only 10,000 of those clicks happened on Twitter.com. The rest happened elsewhere in the Twitter ecosystem, including Facebook which is part of the Twitter ecosystem when they showcase a post that is generated on Twitter, as all of mine are.

So that’s a 4x ratio. That’s a good double check. Whether its 3x (John’s post), 4x (my links), or 5x (incoming traffic to AVC), it is clear that there’s a big difference between the two.

My point is this. You can talk about Twitter.com and then you can talk about the Twitter ecosystem. One is a web site. The other is a fundamental part of the Internet infrastructure. And the latter is 3-5x bigger than the former and that delta is likely to grow even larger.

Twitter has proven the ability to drive traffic, there’s no doubt about that. In large part because users feel confident knowing that when they click on a link they won’t be subjected to advertising. Already we’re seeing people try to cash in on their follower count but they’re easy enough to unfollow but if Twitter allows advertisers directly into the platform, you can’t unfollow that. Of course I imagine a smart application builder will find a way to strip out the ads, which of course would lead to a violation of Twitters TOC…anyway.

I remain skeptical that Twitter’s best approach is advertising. They currently have the richest data set out there, especially if they’re ever able to drive geolocation data. I hope they don’t cheapen it with advertising.

Good Morning America had a segment on making money from home, which included a piece on Twitter. This is wrong on so many levels but also unavoidable. (A small piece of my soul died when I wrote that last sentence.)

Make Money When You Work From Home - ABC News

For You, Tweets Can Mean Cash

For anyone who’s active on Twitter, you can turn those tweets into cash. You probably won’t make tens of thousands of dollars like reality star celebrities, but you might as well give it a shot.

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