A Direct Comparison Between facebook and Twitter May Not Be Useful

Analysts often compare facebook to Twitter. But does such a comparison add real value to our understanding of either business, or their industry?

During facebook’s most recent quarterly earnings conference call, Mark Zuckerberg reported “Messenger and Instagram both reached 200 million monthly actives this quarter”. Turning to Twitter’s most recent quarterly earnings report, one finds a claim of 250 million monthly active users. So does it make sense to conclude facebook’s two components, combined, have a far wider reach than Twitter, itself?

I don’t think so. People consume facebook’s Messenger and/or Instagram features for an entirely different set of requirements, I would argue, than is the case for Twitter. Messenger, Instagram, and even What’s App are all targeted to individuals, without the public reach implicit to Twitter.

An important foundation of Twitter’s broader public reach, of course, is the extensive search capability included with Twitter. This capability is not available with either of facebook’s components. Much has been made about the difficulties businesses, and even individuals experience achieving exposure across a wide range of facebook’s consumers. Perhaps the intention is to predicate this exposure on ad purchases. Nevertheless, it is not possible to achieve the same reach with facebook Messenger, for example, as is the case for Twitter. Further, facebook advertisers are not likely to consider Messenger, as a medium, for the same reasons they would consider Twitter.

The challenge for Twitter management, as I see it, is how to craft this reach into a commodity advertisers will be likely to purchase. In comparison, the challenge of maintaining a meteoric growth rate for new viewers to consume Twitter’s content is a less important objective.

But the analyst community is focusing more on the fact Twitter is approaching a viewer plateau, than the steps management is taking to monetize their content. The end result is not much progress on the revenue front and a lot of spurious attention to expanding Twitter’s reach.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

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