Facebook v Twitter.

sReq | uTeK

So I'd like to buy some facebook or twitter stock.

I've got about 10k roughly to spend.

I believe twitter would be a better investment, it's implied value has shot from 7.7 to 10.6B in the the last 6 months.

Facebook is about to go public, it's got 845 million users and in order to grow it needs to keep growing it's user base something i can't see happening, I BELIEVE facebook will be a stagnent investment unless it takes the route of Google and moves out of the advertising stream and into technology.
I don't think it can grow in the next year and while buying privately now and offloading the shares when it goes public would probably net you some money,
I think twitter is better value for money, it will steadily increase it's userbase over the next few years thus addming more money and value to it's already growing advertising stream, with the host of famous people and celebs who tweet on a daily basis it's now a hot spot for contraversey which brings people even without twitter accounts to browe it.

I'm just really after your two cents on which one PERSONALLY you'd invest in.

xertpo

sReq | uTeK wrote: »

So I'd like to buy some facebook or twitter stock.



I'm just really after your two cents on which one PERSONALLY you'd invest in.

Twitter won't be having an IPO for at last 12-24 months. maybe never.

sReq | uTeK

xertpo wrote: »

Twitter won't be having an IPO for at last 12-24 months. maybe never.

That's part of my intrigue / reservation in investing.

On the one hand I BELIEVE that in those 12-24 months twitter will gorw substantially more than facebook will, (user base) Thus the implied value rising greatly due to more revenue as a result of advertising.

While facebook will struggle to grow when it goes on the market, they've already got 845 million users in order to grow they're going to need alot mroe something I Don't see happening, they would need 1.6 billion users to double in valuation or get close to the likes of AT&T or Google.

An Ri rua

xertpo wrote: »

Twitter won't be having an IPO for at last 12-24 months. maybe never.

You can invest in trends indirectly and also companies indirectly. IPOs or not.

http://money.cnn.com/2011/12/21/technology/gsv_capital/index.htm

http://community.nasdaq.com/News/2011-12/with-300-million-investment-in-twitter-saudi-prince-bets-on-140-characters-or-fewer.aspx?storyid=109741 Follow the money.

Personally, having worked in the internet space since '99, I believe Google plus is very dangerous to Facebook and, given time, has the ability undo it unless FB radically re-designs itself. Its getting over-complicated to correctly set settings as it currently stands (for the average user) and consequently usage is down across the userbase as recent research shows (I don't have that link). Twitter is starting to mature and settle down. It has its uses and users understand those fully, I think, now in 2012.

A caveat though is that Facebook fan pages / business pages are still hugely untapped and, as an alternative to SME websites, make ten thousand times more sense for ROI vis-a-vis updating costs and ownership / control. The age of project-managed website solutions is dying. Its all about modular / wysiwyg tools. FB is intuitive for many business users and I can see that being monetised without too much fuss.

Anyway, just my opinion. Best wishes with your investments.

sReq | uTeK

An Ri rua wrote: »

You can invest in trends indirectly and also companies indirectly. IPOs or not.

http://money.cnn.com/2011/12/21/technology/gsv_capital/index.htm

http://community.nasdaq.com/News/2011-12/with-300-million-investment-in-twitter-saudi-prince-bets-on-140-characters-or-fewer.aspx?storyid=109741 Follow the money.

Personally, having worked in the internet space since '99, I believe Google plus is very dangerous to Facebook and, given time, has the ability undo it unless FB radically re-designs itself. Its getting over-complicated to correctly set settings as it currently stands (for the average user) and consequently usage is down across the userbase as recent research shows (I don't have that link). Twitter is starting to mature and settle down. It has its uses and users understand those fully, I think, now in 2012.

A caveat though is that Facebook fan pages / business pages are still hugely untapped and, as an alternative to SME websites, make ten thousand times more sense for ROI vis-a-vis updating costs and ownership / control. The age of project-managed website solutions is dying. Its all about modular / wysiwyg tools. FB is intuitive for many business users and I can see that being monetised without too much fuss.

Anyway, just my opinion. Best wishes with your investments.

yes, of course it would be investing into privately before it reaches IPO.

An Ri Rua, if you were given 10k to invest now into either company which would you invest in and why.

An Ri rua

sReq | uTeK wrote: »

yes, of course it would be investing into privately before it reaches IPO.

An Ri Rua, if you were given 10k to invest now into either company which would you invest in and why.

Let me come back to you on that shortly. I wouldn't like to rush that answer to anyone. I do think there's too much frenzy around FB value. I still stand strongly by my caveat though. However, again, flipping that around, look how quickly Bebo nosedived. I would not rule out the Google + threat.

Again, let me get back to you with more considered arguments.

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(I got a little carried away - I'm in no way an investor, but I've read a good bit about technology and internet companies and invariably have come across Twitter and Facebook) (Also, anything I say is up for correction. I tried to reference where relevant, but there's probably one or two incorrect things)

I wouldn't know too much about Twitter, but they have constantly been dogged by criticism that they cannot effectively monetise their product.

To the best of my knowledge Twitter gets revenue from two places.

1. Advertising

Sponsored trending topics, sponsored top tweets and sponsored 'who to follow' accounts.

2. Leasing out their Firehose

I.e. all the tweets, to companies who scrape it for information on trends, advertising and other things.

Recently Twitter was sharing it's firehose with Google but Twitter pulled it. You use to be able to do real time searches on Google and tweets would come up. I used it when searching for info about the Egyptian or Tunisian revolutions.

I read that Twitter felt they could create more effective real time searching within their own site, so they parted ways with Google and now I think Google are using or will use Google+ to create the same sort of search function, but I can’t imagine it would be as powerful as Twitter has more users than Google+ and Twitter is primarily an information sharing, while Google+ seems to be some amalgamated social connection hub for everything they can think of.


Here's what I think about Facebook.

I’m not a Facebook fan boy, but it is impossible to get around the fact that they have the most effective advertising show in all the land.

1. Segmentation

Facebook is an advertising behemoth and a marketers dream come true. They have managed to scale one of the holy grails of advertising. Market segmentation.

Off the top of my head Facebook collect the following info on people.

Name
Sex
Location
Age
Email address (s)
Phone number (s)
Work info
Education info
Specific interests in the following topics - sports, music, movies, literature, activities, general other stuff
Connections

They monitor your conversations for key words and sentiment.

All of the above would be the equivalent of a market research person sitting down with someone and having a conversation with a person for 10 or 20 or 30 minutes.

All of the information collected about us by Facebook isn't static. Traditional market research takes information at one point in time. All the information Facebook has is dynamic, because people are constantly updating, liking, and changing information about themselves.

It is dynamic market segmentation at it's most scalable. Imagine the cost and time saved. They are an advertisers dream and will become a monster on the Internet (they already are).

2. Growth

You should also consider that Facebook can grow within it’s current user base while still building upon it’s user base. They currently have 850 million users. The amount of people with access to the Internet is increasing, as is the amount of people with access to the mobile Internet. I'm not going to say therefore they will grow, I'm just stating a fact.

But they can grow in other ways too with just their current user base. Facebook will be (and are) pushing for more engagement. This is happening all the time through them improving their platform upon which companies can build on. Zynga with games, Netflix with TV and Movies and Spotify with music. There is a massive ecosystem and more companies are coming to join. This means that the potential to engage users increases as more is offered to the current user base within this ecosystem.

Facebook tracks daily active users (DAU) and monthly active users (MAU). One of the amazing things is that they have kept the number of DAUs and MAUs pretty steady considering they're close to hitting 1/7th of the world’s population.

Reference

Trends suggest that the amount of people connected to the Internet is increasing as is the number of people with access to the mobile Internet.

If you're serious about investing in one of them (Facebook/Twitter) here is a really good YouTube video by Mary Meeker (Kleiner, Perkins, Caufield & Byers). Its title is "Internet Trends". It's from sometime early last year (Feb 11 possibly), and it highlights growth trends in the internet (funnily enough); mobile and social specifically.

Slides from the presentation here.


3. Mobile

They might also begin showing ads in the mobile apps (Reference). 50% of people access facebook through their mobile (Reference) This is a platform that is untapped but has huge potential for growth if the growth in their advertising revenue on their browser version is anything to go by (Reference).

The negative side to this is that more people browsing on their mobile could mean less on their computer. Ad revenue and other revenue streams gained through computer users could go down as usage on mobile goes up. This will be an interesting thing to keep an eye on. How will Facebook strike that happy medium between mobile and computer to maximise their revenue.


4. Advertising

Because of segmentation Facebook can create more attractive ads that result in much higher engagement rates than advertisements on other platforms. (Reference) This means they are more attractive to companies looking to advertise and the advertisements are more attractive to users because they see their friends endorsing brands and products (sponsored stories and sponsored adverts). This is a virtuous advertising cycle (for Facebook).

One other recent way they are targeting users is through behaviour.( Reference) This could be a pretty powerful new way of targeting, but I guess it’s too early to tell.


5. Other revenue streams

I’ve concentrated a lot on advertising (because that’s the bulk of their revenue stream), but they are also making money from games on their platform like Zynga. Facebook charges 30% on any in game transactions and they are making a lot of money from this. Zynga make up 12% of Facebooks total revenue (Reference). They are also considering increasing the scope of apps that will have to pay to use Facebook (be hosted on the platform or have some connection or other). (Reference
)

This shows there is massive potential because as they build their ecosystem it is harder and harder for companies to get out, without losing a lot of money and wasting the hard work and success they’ve build up over time.

But this could also mean that they are just building barriers for new companies to enter their ecosystem. This is obviously a risk, but not a massive one as I think companies will go where the users are and at the moment and for the foreseeable future they’re on Facebook.


Facebook are streets ahead of Twitter in terms of realising what they are about and what they can do with the information they have collected. Here are two questions for you. When do you want to make this investment and when do you want to realise the gains from it.

Just in relation to some of your comments.

Yes Twitter will most likely grow more than Facebook over the next couple of years. They only have 100 million users (Reference) and their growth hasn’t slowed like Facebooks. It’s not outrageous to say that Twitter will gain 500 million in the next 3 years, while it isn’t a realistic thing for Facebook because their growth is slowing due to the fact that they are on their way to reaching critical mass (i.e. all the users in the world).

But user numbers doesn’t directly equate to valuation. You can’t say 100 million users is 7 billion therefore 200 million is 14 billion etc. The value of Facebook and Twitter in time will be found in what the companies do with the information and resources that they have. Facebook can continue to become more valuable as long as they increase their revenue. It is entirely possible to increase their revenue with a stagnant user base (for a time) as long as they continue to innovate their platform to engage a higher percentage of users. (this example is a little limited, but I’m try to get across my point that user numbers don’t equate to valuation).

If Facebook felt that all investor wanted to know in their sec filing was their total user numbers and growth rates, then they wouldn’t have included information like daily active and monthly active users. But that’s not the case because DAUs and MAUs are extremely valuable as they give further insight into the company.

Would you prefer to invest in a social network with 100 million people, 10% DAUs and 15% MAUs, or one with 50 million people, 40% DAUs and 60% MAUs?

I agree that on the user side Twitter is maturing. The fact that their recent homepage said, “Follow your interests” or something like that attest to the fact that they understand how their user base uses them. But I don’t think Twitter is mature yet in terms of what to do with what they’ve got. It’s like they’re waiting to pounce on a really good idea, but are just sitting around growing their user base for the moment (which isn’t a problem).

Hema

I think that twitter is better than facebook. We can gain and spread knowledge easily with the use of twitter. In facebook most of people doing timepass...........

An Ri rua

@sternbutfair Amazing post! Excellent food for thought there.

Interesting take here on the logic of an IPO for Facebook at this stage in its growth curve and a reference to Zuckerberg still owning 57% so no market knee-jerk responses.

http://www.good.is/post/why-po-mark-zuckerberg-s-strange-plan-to-finance-his-company/

An Ri rua

Just received a Motley Fool Newsletter with the heading 'Forget Facebook. Let's make some real money'.
http://www.fool.com/m.aspx?i=25356280&u=1540137937&src=isaspodft0000099

Definitely worth a read. Beats watching 'The Voice'. Although I'm sure most reading this forum aren't rotting their brains away!

Kristopherus

An Ri rua wrote: »

Just received a Motley Fool Newsletter with the heading 'Forget Facebook. Let's make some real money'.
http://www.fool.com/m.aspx?i=25356280&u=1540137937&src=isaspodft0000099

Definitely worth a read. Beats watching 'The Voice'. Although I'm sure most reading this forum aren't rotting their brains away!

A lovely sales Letter:D. the 3 companies referred to in that advertical are (1) Dassault Systeme (DSY Paris & DASTY in NY Pink Sheets) (2)Stratasys(SSYS) (3) 3D Systems (DDD). More info here http://stockgumshoe.com/reviews/motley-fool-stock-advisor/forget-about-facebook-lets-make-some-real-money-motley-fool/