Both Twitter Inc (NYSE:TWTR) and Facebook Inc (NASDAQ:FB) reported its third quarter earnings last week. Twitter reported rather disappointing results failing to meet the expectations on user growth. Twitter Shares also plunged down heavily following the disappointing report. On the other hand Facebook reported a good third quarter earnings. Since both the social media giants operate on the same business model, analysts and investors try to find the differences between the two. Benchmark General Partners Bill Gurley talked on CNBC about the two social media companies and how one has higher potential than the other.
Twitter Inc (NYSE:TWTR) stock prices again went down by around 4% on Monday and closed at $40.21 per share. Many believe that the reason behind the poor performance of Twitter is mainly due to the aimless management and unclear role definition for executives. Gurley said that Facebook Inc (NASDAQ:FB) had a similar poor patch right after its IPO, when many questioned that longevity of the organization. He feels that Twitter Inc (NYSE:TWTR) is in a similar phase now.
“[…] I think it’s remarkably likely that they (Twitter) are going to end up much higher than Facebook. People that are using Twitter […] are looking at things that are tied specifically to their interest. You can getter way better ad dollars when someone is doing that than you can when someone is sharing photos about a kitten,” Gurley said.
CNBC’s Jon Fortt mentioned that Twitter Inc (NYSE:TWTR) has recorded more logged out users in the quarter compared to Facebook Inc (NASDAQ:FB), which shows that the users are not as engaged in Twitter platform as they are in Facebook platform. He questioned if that increase in logged out users providing much less information about them a concern for Twitter Inc (NYSE:TWTR).
Gurley believes that Twitter Inc (NYSE:TWTR) has a strong platform and users like him care a lot about Twitter profile. He feels that most of the users would like to keep the profile updated and switch the Twitter handle frequently. He thinks that the company gets a lot of self-promotion from the users. He mentioned that Twitter is working to get in to a bigger segment of people and will eventually get there.
“[…] I just think we are in this period where people are more skeptical than they are optimistic, but we will see with the numbers delivered,” Gurley said.
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