Facebook Inc (NASDAQ:FB) Unnerved by Twitter Inc (NYSE:TWTR)?

Posted by Chris Bell January 14, 2014 0 Comment 1814 views

Is Facebook Inc (NASDAQ:FB) feeling the heat from Twitter Inc (NYSE:LTWTR)? After all Twitter has managed to get 70% of its revenues from the mobile platform and also attract valuations that companies can only dream of. With revenues of only $200 million expected in the last quarter, is Twitter really worth the trouble?

Where have the Teens Gone?

However, it does seem that Facebook is looking at introducing something new in its platform. There are already reports that the teen group consisting of 15-18 age group is not very active on Facebook, in fact they seem to be withdrawing and joining rival social media platforms. The reasons may be different; as such this group is very fickle and rebellious. They seem to be put off by their parents’ presence on Facebook. The parents drive in the revenues as advertisers like to target the real decision makers and those that hold the purse strings. But the teens drive the user base, they can make or break a trend; operationally called ‘making it go viral’. They are also more sensitive to their privacy, some of the recent changes in the privacy policies may not really gel with them.

Acquisitions to counter Twitter:

How can Facebook Inc (NASDAQ:FB) retain this crucial user base? In an attempt to mimic Twitter, Facebook appears to have acquired two link sharing apps Branch and Potluck. This would enable FB to put real time news feeds about the current events, just like Twitter does. Potluck breaks news articles down in three cards from links, summarizes the article and allows it to be shared on social media platform. Branch, on the other hand, allows the links to be shared, discussed and post the entire discussions on social media sites. Like its acquisition last week of Little Eyes, it appears one more way for Facebook to stay relevant.

Apart from the changing trend, Facebook Inc (NASDAQ:FB) has still very little to fear from Twitter. Revenues at Twitter are still a small percentage of its revenues, it is still not profitable and most important of all, advertisers are yet to understand Twitter’s business model. Even there is a big difference in the users, against Facebook’s 1 billion users; Twitter has managed to attract only 200+ million users.

All this can change in a very little time. And Facebook knows that the only thing constant in life is change. And change it must, to remain relevant in the social media platform.

About Chris Bell

Chris Bell is an investing reporter for GDP Insider. Chris covers financial markets and Wall Street, concentrating on developments affecting individual investors and their portfolios. Chris is also over consumer reporter and covers a wide variety of issues ranging from housing to immigration to urban poverty. Chris graduated from the University of Scranton with a degree in Communication and Philosophy. Chris's diligent investigations earned him the honor of being named "Best Reporter" once by the Headliners Foundation of Texas and once by the Houston Press Club.

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