So what happened? There are some simple explanations. Meerkat founder and CEO Ben Rubin says the company was featured in the app store for a week, saw a huge spike in downloads, and is now simply back to where it began. Meerkat's popularity is sliding because its hype got ahead of its actual traction, and we are now seeing a correction as the press and promotion dies down.

Last Thursday was also the day that Twitter debuted its Meerkat competitor, Periscope. I watched as many of the early adopters who had been experimenting with Meerkat moved over and started using Periscope instead. It wasn't a total exodus, but where there had been effectively one choice, there were now two. And three days later, no doubt thanks to the power of its parent company, Periscope had passed Meerkat in size, at least in terms of Twitter mentions, which is the central mechanism for distribution for both.

Meerkat's slide in the app store inspired a blistering editorial from Tero Kuittinen, who bashed the journalists and investors praising it as the next big thing. "There is also no doubt that if Jared Leto and his merry band had realized a week ago that Meerkat would drop out of the top 500 iPhone app chart by Sunday night, they would have slammed their check books shut in a hurry. They were obviously blinded by the tech journalism flimflammery that has gone on unabated in America in recent weeks."

It's worth asking if the tail wags the dog in startup circles these days. The market for venture capital investment — and subsequent headlines about those billion-dollar valuations — is definitely frothy. I don't think that means however, as several articles have argued, that the app is destined for the deadpool.

The problem with both Meerkat and Periscope right now is that when you open the app, you are greeted with a completely random collection of streams. Most of them are just ordinary people living their lives, and the average day for most people is pretty boring. Most broadcasters haven't learned what makes for compelling content, and the apps aren't robust enough yet to suggest great stuff when you open it. We're still in the embryonic stage of mobile live streaming. Think of it like Twitter when most people just tweeted about what they had for breakfast.

That leads us to a more interesting question: can live streaming be the basis of a sustainable consumer product? Pseudo, Qik, Justin.TV, uStream, and many others either sold out, folded, or pivoted to the enterprise. It's been a sort of holy grail for internet evangelists since the 1990s, but didn't make sense until we all had good cameras in our pockets, supported by fast data connections and underpinned by robust social networks.

With those pieces in place, however, live-streaming services like YouNow are building big audiences and generating serious revenue. This is not a fantasy product whose users consist solely of techies and journalists. It's a cashier from Brooklyn and a teenager from North Carolina and a dentist from Egypt who have built passionate fan bases.

I don't know if the culture on YouNow will translate to Meerkat and Periscope, to the mainstream of live streaming in other words. Hundreds of teens will watch their favorite performer sleep for hours on YouNow, keeping each other entertained with conversation in the chat. I doubt that sort of scintillating content is going to help Meerkat or Periscope find its audience.

Data from Bitly Brand Tools

Does that mean Meerkat is going to thrive? The backlash and scrutiny from the press that built them up will no doubt be brutal. And it's tough to compete with a product being pushed by the same platform you're relying on for distribution and engagement. They have millions in the banks and some very famous funders. I think mobile live streaming is here to stay, but you'll have to stay tuned to see who survives.