leaky_bucket

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Yes, Twitter has a growth problem. But more than that, the company has another headache: Getting people to stick around after signing up.

According to people close to the company, Twitter has seen more than one billion registrations to its service over the past seven and a half years. Stack up that figure against the most recent active user number — 241 million — and you’ve got a retention rate somewhere in the mid-20 percent range.

Caveat: This billion-plus stat is complicated by Twitter’s massive spam problem and the subsequent purge that occurred last year. But suffice to say, registrations are still high compared to the number of current active users.

It’s called the “leaky bucket” in product terms, and Twitter needs to figure out how to patch it.

Part of the problem is something Twitter has known all along. It’s a tough service for a newcomer to understand. Unlike Facebook, there’s a learning curve for Twitter vocabulary, for sending tweets, even for learning how to read the service. And not everyone wants to spend the time figuring it out.

The other headache is, even if folks do figure out how this Twitter thing works, they don’t have anyone to converse with on the service. If Twitter professes to be the best place for “real-time, in the moment conversation,” as CEO Dick Costolo so often says, newbies need to see that during their first days on the service. Right now, they’re being told to follow high-profile celebs at sign-up; that’s cool if you want to see what Kobe is tweeting lately, but don’t expect him to reply to your tweets.

In that vein, Costolo this week hinted at changes to come. “The native mobile sign-up that we are launching allows us to make on-boarding much more seamless for people and quickly connect you with the people you know who are already on Twitter,” Costolo said on a conference call with analysts on Wednesday.

Translation: Twitter will check out your phone book for other people you know who are already on Twitter, and let you follow them from day one. In theory, tweeting with your friends early on will make you come back to the service more often.

“Our user research tells us that this drives increased interaction from day one, and significantly higher growth over time,” Costolo said. The feature is now available in the U.S. for Android users and is rolling out soon on iOS.

The company is also experimenting with sending emails to inactive accounts, or vaguely worded emails that entice users to go directly to Twitter.com when they receive direct messages. I’ve received both of these, and they’re slightly annoying. But to be fair, I’m not the demographic Twitter is looking to lure back in — maybe it’ll work on others.

Whatever the case, the Street has spoken: If Twitter truly wants to “reach every person on the planet,” it needs to figure this retention thing out, fast.




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