The comparisons between Twitter Inc (NYSE:TWTR) and Facebook Inc (NASDAQ:FB) continue, particularly now that Twitter is pushing further and further into monetizing its platform. Some analysts prefer Facebook’s chances at success, but Bernstein analysts think Twitter may do better than Facebook. They base their ideas on some very interesting but potentially somewhat anecdotal observations.
Are Twitter users lurking?
Analysts Carlos Kirjner, Peter Paskhaver and Garrett Marks point to a trend they notice in use among those on Twitter. To come up with this idea, they collected their own database of over 5 million Twitter users. They excluded those with fewer than ten followers in an effort to weed out users who are inactive.
After analyzing their proprietary database, they suggest that more than half of the social network’s monthly active users are “lurkers.” They define a lurker as someone who doesn’t tweet very often (less than once every ten days), but instead spends a lot of time reading the platform and looking for links to click on. They think such users could be “more receptive” to advertisements placed in the feed, which of course would be a good thing for Twitter Inc (NYSE:TWTR).
Of course they do note some exceptions to this sort of lurking behavior they observed. Not everyone who’s just reading Twitter is necessarily looking to discover new links. Some people are just simply following every word spoken by a celebrity and don’t care about links.
Implications for monetization on Twitter
Because of the value lurking behavior could hold for Twitter Inc (NYSE:TWTR), the Bernstein team believes click-through rates could end up being higher on Twitter than they are on Facebook Inc (NASDAQ:FB). The analysts see ads on Twitter as being “less intrusive” to users than they are on Facebook, purely because of the nature of using each of the platforms.
They note that Twitter tends to be a public platform where anyone can see what anyone else tweets. Facebook, on the other hand, is private, so comments go only to friends. The analysts believe that users who are browsing through photos of friends and family, as they do on Facebook, are less likely to click on ads than those who are browsing through Twitter’s public platform.
Bernstein continues to see Twitter Inc (NYSE:TWTR) as being fairly valued and carrying a “very high degree of uncertainty on both the upside and downside.” They have a Market-Perform rating and $40 per share price target on the stock.
