Twitter could be preparing for a new standalone instant message application

As we discussed in the previous article in this series, Twitter (TWTR) has been facing tough competition from standalone instant messaging applications like WhatsApp, LINE, and Kakao. While Twitter is mainly intended for exchanging public status updates, the platform’s direct messaging (or DM) feature has become a mainstay functionality. Through the DM service, a Twitter user can send private messages to other Twitter users if they’re following each other. Twitter has been trying to make changes to its DM service in order to increase its coverage. In October last year, it started allowing users to send direct messages to other users even if they don’t follow the user. There have been rumors that this feature was enabled possibly in preparation for a new standalone direct messaging application. Apparently, that was just an experiment, and later the company withdrew this feature.

Is Twitter doing enough to counter instant messaging competition?

The instant messaging space has become bigger

Competition for Twitter is increasing daily in the direct messaging space. WhatsApp, LINE, and Kakao have become formidable competitors to Twitter’s direct messaging service. For instance, LINE—which is an application developed by Korean search company NHN Naver and its Japanese subsidiary, NHN—is reportedly coming up with a $28 billion IPO, according to the Korean news site MT Report. And now Facebook’s (FB) acquisition of WhatsApp for $19 billion has re-affirmed the big stakes the market is willing to take on instant messaging business.

Twitter’s slow in the fast-growing social media space

Twitter’s growth has been slow over the years. According to the above chart, if we compare the number of monthly active users by the end of Twitter’s fourth year of operation, we find that WhatsApp had 419 million users, Facebook had 145 million, Google’s (GOOG) Gmail had 123 million, Twitter had 54 million, and Skype had 52 million. This goes to show that Twitter has lagged behind its competitors in attracting users to its platform, and it will need to do much more to catch up with the competition. Twitter will need to find a way to enter the standalone instant messaging sooner than later—and in a big way. Otherwise, the gap between Twitter and competitors will just grow bigger with time.

To learn more about Facebook’s WhatsApp acquisition, see the Market Realist series Facebook’s WhatsApp purchase may not be as expensive as you think.

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