"Why would anyone use this?" is what many said of Twitter (NYSE:TWTR) in 2007. And, to be fair, many novel ways of using it had yet to be discovered. Updates on someone's breakfast or fight with their landlord seemed like the most trivial aspects of Facebook (NASDAQ: FB). But through the years, we've discovered that people do care about a celebrity's breakfast -- and while news of a landlord fight may not make Twitter valuable, news of broader civil unrest definitely does.
Make it rain breakfast burritos— KATY PERRY (@katyperry) April 22, 2014
For example, during the Arab Spring, many turned to Twitter to not only broadcast news of events to the world, but communicate with one another as other traditional means of communication were cut. Now Twitter is usually the first place to find breaking news on a subject, from citizens and journalists alike.
a 6:45p se había hecho retroceder la ballena sin violencia. hasta que alguien lanzó una piedra y represión desmedida pic.twitter.com/8ztn32EdlO
— Andres E. Azpurua (@andresAzp) February 16, 2014
However, a new trend may take this value away from Twitter, pioneered by apps similar to Facebook's WhatsApp.
Pulling versus pushing
News services like the BBC have been trying out a new way to alert users to breaking news, with a much higher chance of being read than it would have if tweeted. In April, the BBC tested sending out news updates and receiving news tips from citizens before Indian elections through WhatsApp and Tencent's (NASDAQOTH:TCEHY) WeChat. Instead of a user sifting through tweets to find relevant news information, news gets sent out to a user's phone with an alert, similar to that of any text message. With Twitter, Katy Perry's breakfast decisions have equal priority with toppling governments, meaning important news items could be lost in the noise.
— Trushar Barot (@Trushar) April 4, 2014
It's the difference between a passive, noisy service in which a user has to filter and pull information and an active, focused service in which the relevant information is pushed out to a user.
An opportunity to cross the moat
Many chat applications that are popular in Asia, like LINE, already have features that allow a user to subscribe to news updates, but such services have yet to catch on in America. As Twitter ages, and a user's account becomes cluttered with tweets that may have lost relevance, there's an opportunity for WhatsApp and others to offer a better service in breaking news delivery.
WhatsApp's latest directive from its new owners at Facebook is simply "grow," with no worries about revenue. While Twitter has deep pockets, with over $2 billion in cash and short-term investments, it's unlikely it can outspend Facebook's cash-generating power. If WhatsApp can supplant Twitter as a breaking news provider, then one of Twitter's strongest use cases disappears. Then, Twitter ends up more as a tabloid than a legitimate news outlet.
Or a stronger industry
On the other hand, if more news is delivered through chat apps, more people might read stories on their phones, and then turn to Twitter to find more sources and information. While news consumption is often more about stealing market share than growing market size, it is possible that a more engaged readership could benefit all services.
Twitter will need to be vigilant about remaining relevant either way. This could mean helping users clean up their streams of tweets, rolling out a Facebook-like algorithm to display only relevant tweets, or making high-priority tweets alert a user. It definitely means keeping the population of bots and spam in check -- last reported at 5% of Twitter's users.
Dan Newman owns shares of Twitter. The Motley Fool recommends Facebook and Twitter. The Motley Fool owns shares of Facebook. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.