Ever since Twitter Inc (NASDAQ:TWTR) conducted its its IPO last year, the Street has compared it with Facebook Inc (NASDAQ:FB). Especially after Facebook Inc (NASDAQ:FB) came out with brilliant second quarter results last week, surprising the Street and Twitter Inc (NASDAQ:TWTR) is coming with its own results this week, talks about the similarities and differences between the companies has increased.
But is it really fair to compare Twitter Inc (NASDAQ:TWTR) with Facebook Inc (NASDAQ:FB)? That was the topic of discussion between Zack Seward, Senior Editor, Quartz and Joshua Brown, author of the investing blog, The Reformed Broker on today’s edition of CNBC’s ‘Half Time Report’.
“Well Twitter Inc (NASDAQ:TWTR) is certainly going to make that argument, but that’s kind of a bait and switch, they went public as a tech company promising that they could have a billion or more users along the lines of Facebook Inc (NASDAQ:FB). Now they are talking much more like a media company. They have great advertising revenue growth, you could buy it as a media stock and think that there’s a lot of potential there. But as a tech company, I don’t think that there’s a comparison at all,” Seward said.
Moreover, when looking at some metrics, while Twitter Inc (NASDAQ:TWTR)’s average revenue per user is estimated at $0.96 and monthly active users are estimated to be 267 million, the figures that Facebook Inc (NASDAQ:FB) reported for the same metric are $2.06 and 1.32 billion, respectively.
“So, if you are an investor, one is up 50%, one is down 40%. One is few years further along in its pace of growth and the other one has a lot more potential than it does, success under its belts. It’s pretty obvious to me where the greater potential could be, doesn’t mean it will definitely happen, but if you are investing based on the future and not the past, I think Twitter Inc (NASDAQ:TWTR) is the winner […],” Brown added.