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According to Web audience measurement service QuantCast, Twitter has stopped growing. After peaking at 24.4 million U.S. visitors per month, the traffic has died down to about 22 million. That's an abrupt about-face for a service that blossomed from 1.4 million readers to those 24 million in a matter of about five months.
Oh, Fail Whale, where are you now?
Take a deep breath
OK, one data point from a single source is hardly a death certificate for the hugely popular microblogging site. Twitter is not going to backpedal, shrink, and die from here. But it's enough to make you sit up and think about the concept of massive growth and what to expect from those bottle rockets.
Microsoft (Nasdaq: MSFT ) used to be the standard example of a growth stock. The S&P 500 index was a four-bagger in the 1990s -- but Microsoft crushed it with a nearly 10,000% rise in split-adjusted share prices. Now, Mr. Softy has grown up. Sales have merely tripled in the last 10 years and net income never even doubled. The stock price is down more than 60% in this millennium, underperforming the S&P's 40% swoon. Microsoft pays a quarterly dividend now. This is a value stock these days, or even a dividend income stub.
Other legendary highfliers, like Starbucks (Nasdaq: SBUX ) and Google (Nasdaq: GOOG ) , have largely followed the same pattern: massive growth in every metric that matters -- up to a point. As these market darlings face the cold, hard realities of mathematics, they stop doubling every six months or whatever their early rise may have indicated.
And that's where the stocks stop, drop, and roll.
Twitter isn't even public yet, but has already run into a glass ceiling of sorts. Maybe it's just a seasonal effect with schools ringing out for summer and everybody leaving their twitterrific Apple (Nasdaq: AAPL ) iPhones or Research In Motion (Nasdaq: RIMM ) BlackBerrys on the beach towel for a quick swim. The summer months tend to slacken Web traffic considerably as everyone gets some sun. Twitter's growth might -- might -- pick up again in September.
Dollars and sense
Just how much value would there be in a Twitter IPO? Multibillion-dollar estimates seem to assume astronomical growth for years to come, but Twitter has no real revenue model yet, and 22 million users won't pay the pied piper with that sort of valuation.
How about Facebook? It's one of the most popular sites on the Web today with more than 90 million monthly visitors, and with early round investments from Microsoft and others that would imply a $10 billion valuation or more. And Facebook does make some money from advertising, unlike Twitter. But it ain't no Google-like marketing powerhouse. Facebook probably will go public eventually, but it'll take years to figure out exactly what it's worth. I'm not touching that IPO, when it comes around.
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