) is easily the world's largest social network. With more than
one billion users, it trounces Twitter by more than a few hundred
million. Nonetheless, the company has not had an easy road to
profitability. While shares are up nearly two percent this
afternoon, Facebook is still trading 25 percent lower than its
debut price. The company
continued to plummet
after announcing its fourth quarter results,
Facebook has increased profitability while demonstrating that
it has a long-term plan for the future. It may not be everything
investors wanted, but it ensures the company will survive.
However, there are a few unexpected forces at work that could
present some challenges going forward.
"Celebrities are increasingly using Twitter and moving away
from Facebook," Trip Chowdhry, Managing Director of Equity
Research at Global Equities Research, said in a note to investors
Actors and athletes may not be the only ones who have
abandoned Facebook (or reduced their Facebook usage) for Twitter.
According to the
, teens are slowly migrating to the 140-character format.
"Twitter is like a backstage pass to a concert," Jason
Hennessey, CEO of marketing agency Everspark Interactive, told
AP. "You could send a tweet to Justin Bieber 10 minutes before
the concert, and there's a chance he might tweet you back."
If Twitter had come before Facebook, it might be the dominant
social media site. While it may have to settle for second place,
studies show that Twitter is doing very well. According to a
September 2012 report by
, Twitter has already amassed 500 million users. Based on that
figure, one could estimate that one out of every two Facebook
users also have a Twitter account.
This is a significant jump from March 2011. Back then Twitter
175 million registered users
, while Facebook had 600 million MAUs (monthly active users).
Thus, Twitter appears to be growing at a faster rate than
Facebook. It also seems to be encroaching on Facebook's territory
by quickly closing the gap between users.
That said, it is wholly possible for both social networks to
exist side-by-side. Unlike MySpace, which was overtaken by a
superior social network, Twitter and Facebook do not have to be
enemies. They are two drastically different versions of the same
beast. More often than not, consumers want access to both.
In addition to the celebrity switch, Chowdhry said that
WhatsApp is "gaining traction against Facebook."
"Social monetization is still in a very gradual progress
mode," he added.
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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