Is the Bloom Off of the Social Networking Rose?

It seems that way as Twitter disclosed how growth is slowing.

But Twitter's slowing growth has obviously spooked investors. The company said its active user base reached 241 million at the end of the fourth quarter, up only 4% from the previous quarter. That’s the slowest quarterly rate of increase Twitter has disclosed and less than half the rate of a year ago. Just in the United States, active users increased less than 2% to 54 million, one-third the growth rate of a year ago.

Facebook has also seen its quarterly growth in usership tail off.  Overall monthly active users increased just 3% in the fourth quarter from three months earlier and U.S. usership grew only 1%. A recent Pew Research report also found that only 10% of Facebook users update their status daily.

I think they are pretty close to critical mass as this article points out that 73% of adults are using some form of social networking. I think that is pretty close to saturation. You add to the fact that people seem to be leaving social networks slowly but surely and those companies need to reinvent themselves to keep up their valuations.