Twitter Inc (NYSE:TWTR)‘s investment in Periscope seems to be paying off extremely well. The live-streaming app with re-playable feature has gone viral with mobile users. Although only in its early days, it has already scored a major win, cutting into the space of rival broadcasting mobile app, Meerkat. CNBC market expert and CEO of Ritholtz Wealth Management, Josh Brown believes Twitter Inc’s Periscope is showing potential to become the next best thing on the internet; a game-changer that can have an extremely positive affect on Twitter Inc’s revenue. It is Twitter Inc’s answer to Facebook Inc (NASDAQ:FB)‘s Instagram and WhatsApp.
“This is not taking a video, this is live sharing of video through your traditional social graph in real time, and it’s beyond that: people are commenting as you are filming so you could actually take questions live. You can actually ask the audience. […] You could actually be directed by the audience. There is like a million things you can do. You’re going to see war correspondents using this. You’ll see pro-athletes. You’ll see pop-stars. And a lot of regular people figuring out cool stuff to do,” Brown said.
Facebook Inc (NASDAQ:FB) acquired Instagram for a billion dollars three years ago, and WhatsApp last year for a staggering $22 billion. The WhatsApp acquisition was seen by a few as an extravagant acquisition, but there was speculation that Facebook Inc rightly saw profitability potential in the web application’s rapidly rising number of subscribers. While Twitter Inc has been late to wake up to the competition and has a lot of catching up to do versus its arch-rival Facebook Inc, it has finally scored its first significant acquisition in the form of Periscope, and it may not be long before Twitter Inc starts seeing the influence of Periscope on its shares.
“Here’s the point. When Instagram was bought by Facebook for a billion dollars three years ago, everyone thought it was either a novelty or just another photo sharing app. Citi Group says that Instagram, if it were publicly traded on its own, would be worth $35 billion right now. I don’t know if Periscope is going to be Twitter’s Instagram, but just the fact that it could turn into something like that is very exciting and I do think it’s been supporting Twitter’s shares in the last few days, as people get their arms around what the opportunity might be,” Brown said.
When Twitter Inc (NYSE:TWTR) launched Periscope a week ago, the broadcasting feature on the platform was dominated by Meerkat, but within a matter of days Periscope has cut off Meerkat from Twitter Inc’s social graph, thanks partly to Twitter Inc’s deep pockets and its sensible marketing technique. Periscope is now being discussed all over Twitter Inc. Jon Najarian, Josh’s fellow analyst on the CNBC panel endorsed his thoughts on Periscope.
“What I think the game-changer, which Josh is speaking of here, is that the folks over at Twitter actually reacted and made an investment which I think was incumbent upon them to do. […] I think they missed out on Instagram; missed out on WhatsApp – if they could have gone after either of those two successfully, it would have changed the company very positively against Facebook,” Najarian said.
Periscope gives us a glimpse of what the future of the mobile web is but we still have to see if it can sustain and make the same contribution to Twitter Inc (NYSE:TWTR)’s revenue as Instagram and WhatsApp have made to Facebook Inc’s revenue. The initial indicator is that Twitter Inc’s shares have gone up by 11% since acquiring Periscope, something that CEO Dick Costolo must be proud of. It does also give Facebook Inc (NASDAQ:FB) something to worry about as Periscope’s popularity promises significant growth in subscribers for Twitter Inc and that will put Twitter Inc in a lot better position in the market, against Facebook Inc.
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