In the endlessly self-referential world of Twitter, the company made its own headlines today with the rollout of Twitter Lists. The microblogging service has now enabled about 50% of Twitter accounts with the functionality, which is slowly trending on the site.

Twitterers, blogs and news sites are atwitter with the news, but in order for Lists to serve its purpose, it needs to bring in more users and get current followers more addicted to tweeting. Can functionality like Lists turn the tide for Twitter?

A small subset of users read and write most of the updates on Twitter. But the average user isn’t active at all. If Twitter wants to achieve mainstream success, or get close to the business quasi-competitor Facebook is doing, it needs to increase its user base and keep its current followers coming back for more. Some people think that’s not going to happen.

According to Hitwise this week, Facebook is currently leaving Twitter in the dust. It’s no surprise that the fledgling service can’t compete with Facebook’s established traffic, but if it is losing relevance, that is a big problem.

And Hitwise’s Kim-Mai Cutler thinks they are. They’ve found that while Facebook’s popularity continues to grow, Twitter’s web traffic has been declining over the last six months.

Those numbers are far from definitive, considering that many twitterers use moblie apps to access the service, but it could be indicative of a trend. And any loss of stickiness is a problem for Twitter.

Twitter co-founder Ev Williams touched on his site’s traffic numbers at last week’s Web 2.0 Summit in San Francisco:

“It’s growing in some areas and slowing in others. We’re seeing growth internationally and in mobile. [Traffic] is not a very good gauge. Our U.S. traffic has probably slowed temporarily. There are some things we’re launching that will pick that back up.”

And that’s part of where Lists come in. Twitter is a niche service — with average users that are completely unengaged. But
for Twitter to continue to grow, it needs to become a neccessity in the
daily lives of its users.

If Twitter can help its users
sift the wheat from the chaff of pertinent news, it can greatly
increase its utility. Services like Tweetdeck have already been doing
this for some users, but putting the functionality directly intoTwitter’s interface is a big step forward.

With half of Twitter users getting List functionality today, the term “Twitter Lists” is on track to become the top trending item on Twitter today. And Lists have received plenty of coverage. Multitudes of users are at work creating and sharing lists, and Listorious already exists to help sift through them all.*

Meanwhile, Tech blogger Robert Scoble announced today that he’s done with RSS after getting access to the new service. Twitter has already caused many users to take a break from their news feeds, and if Lists helps cut the chord, that would be great for the microblogging service.

If Twitter can become a one-stop shop for online news and information, it will become increasingly valuable to anyone surfing the web. But as it grows in popularity, the clutter grows with it. And while just getting headlines on Twitter may be easier than reading through the cumbersome layout of many RSS readers, its functionality is not to deliver the news.

Part of the value in tweets is their personalized nature. While lists can help sort out what people are eating for lunch, the on the fly nature of the service means that Twitter will never be clutter free. Because of that, lists have the potential to get as disjointed as many RSS feeds have become for users. But that doesn’t mean Twitter Lists can’t be useful. At least until something better comes along for users.

*List services only work for Twitter users who have Lists enabled.

Images: Twitter, HitWise