Twitter’s Vine: What’s the Big Deal?

Twitter’s new video-sharing app Vine has been the subject of media adoration and Facebook (NASDAQ:FB) ire, leaving one to wonder: What’s the big deal?

Vine only allows 6-second looped videos. The video quality is low, the inability to edit videos gives content a raw feel, and the program is so simple you don’t even have to tap a play button. It’s a wacky concept, but much like Twitter and its low-attention-span approach to the world, it actually has the potential for unleashing creativity.

Maybe a little too much creativity, in fact.

The app quickly became a hotbed for porn, putting the microscope on Apple (NASDAQ:AAPL), which has kept listing Vine on its App Store despite its negative stance against other apps with adult content.

Regardless, Vine has gotten lots of enthusiastic reviews in the media and blogosphere. For example, lWired’s Mat Honan featured the app in his post, “Why Vine’s Going to Grow Into Something Huge,” and MacLife called it a “standalone service that seriously impresses from the get-go.” The app has gotten so much buzz, in fact, that rival Viddy booted CEO and co-founder Brett O’Brien, who previously turned down an offer from Twitter.

The apparent potential for quick popularity also has been a double-edged sword; rival Facebook (NASDAQ:FB) blocked the integration feature with its massive database of friends, worrying about the boost it could give Twitter.

All in all, though, there’s a couple important lessons to be learned from Vine’s hot success:

For one, simplicity matters. Mobile devices have limited screens; thus, the most successful mobile apps tend to be those that try not to do too much with what little they have. A great example of this is SnapChat, whose main feature is simply delivering self-destructing picture messages.

Also, it’s clear that the mega-players have a great advantage: existing user bases. Twitter has leveraged its platform to make Vine a success, and the formula is a no-brainer for other companies like Facebook, Groupon (NASDAQ:GRPN) and Zynga (NASDAQ:ZNGA). The question then is how to make money — via advertising or charging the app.

Either way, with mobile becoming the highest priority, it’s a good bet we’ll see a growing flood of apps from these companies.

Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of “How to Create the Next Facebook” and “High-Profit IPO Strategies: Finding Breakout IPOs for Investors and Traders.” Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.

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