Last month, Twitter celebrated its fifth birthday. I was surprised when I heard this, because it did not feel like it has been that long. However, I also realized that Twitter is now 5 years old and still has some basic issues. I am not going to complain about the issues directly, but I am starting to wonder if Twitter’s issues are leaving the gate open to serious competition.

The possibility for competition has become greater lately. First, there are Twitter’s problems with their developer ecosystem. They have also had some problems with applications owned by UberMedia. This all makes the rumors of a rival network that much more interesting:

According to a report today from CNN, the new service “would seek to attract users by addressing common complaints about Twitter, such as its restriction on the length of a message and how it can be confusing to newcomers.”

What could UberMedia do to really create a Twitter competitor? First, there is the rumored acquisition of TweetDeck. If this acquisition is true, then UberMedia owns one of the more popular Twitter clients, and they also own TweetDeck’s long posting service Deck.ly. Deck.ly is interesting mainly because it is trying to break the 140-character limit of Twitter. Trying to make Deck.ly gain adoption as an add-on to Twitter will be difficult. Using Deck.ly as the basis for a Twitter-like network is very interesting. To make the TweetDeck angle more interesting, they recently launched the TweetDeck Web beta, which some people are calling a #NewTwitter rival. However, just creating this new network will be a long slog. Twitter is fairly well-established and a lot of other web applications integrate with it nicely. Just looking at the various mobile clients and the possibilities with TweetDeck, it would be immensely difficult to create something that really competes with Twitter.

So, what else would UberMedia need to do to really compete? Federate. One of Twitter’s big issues is still stability, mainly because it is a single point of failure. Twitter has basically become infrastructure for a new form of electronic communication. In order to compete with Twitter, you need to be a lot like them. First, you want the power of the developer ecosystem, so you would need to build an API that is very similar. You would really want to avoid the stability issues, and the best option would be to federate the network. This is where it could become difficult from an application perspective, but there is a really good option to pursue. Trying to build a federated network would be difficult and time-consuming. UberMedia seems to like acquiring good technology, so why not purchase Status.net? They have been working on a Twitter-like network with Identi.ca, have a similar API to Twitter, and they have been working on federating the whole thing. Adding better integration for status.net based networks to TweetDeck and the other UberMedia applications would not be a tough problem. UberMedia could create a serious competitor at that point.

On the other hand, Twitter has a head start. Competing with Twitter would be an uphill battle at best. They have also been building a solid development organization and they have been talking about new features. There is the analytics product for advertisers with rumors that there is an analytics product for all users coming, enhancements for “who to follow” so you can browse by topic, and rumored Twitter brand pages. The real question for Twitter is what do they need to do to stay ahead of competition? There is obvious need for the web user interface to improve, especially if they need to compete with TweetDeck’s UI, but that is really just something that needs improvement. Analytics for users is an interesting idea, but there is not a huge demand for it. Analytics for things like link tracking, and marketing/advertising information would be good but that is really focused more on power users than the mass consumer. Better integration with other media types, like images, audio and video, would definitely help, but these are still just improvements. What else can they do without branching out into more direct competition with Facebook?

The key could be embracing how many people are using the application. If there are a lot of users treating Twitter as their source of information, then why not embrace the concept of Twitter being your personalized news source? Some of this has started with topic based recommendations for who to follow. However, the categorization of tweets themselves would be required for better personalization. Getting into personalized news could improve engagement as well for some people. Another direction that Twitter could take is the social media management application. Twitter has also been mentioned in the same breath as “changing world communication”.

Twitter has some great potential that has not been realized yet. With leadership in transition and competitors on the horizon, they really need to focus on product development. So I ask, Twitter, what do you want to be when you grow up?