The social media revolution and the popularity of the medium, not to mention its commercial potential, has led to several new sites emerging from nowhere to prominence over the last couple of years. LinkedIn Corp (NYSE:LNKD) and Instagram are becoming household names, while others such as Snapchat are set for big things in the coming months and years.
Twitter and Facebook still dominant
But there is no doubt which two social media sites continue to dominate the medium. Twitter Inc (NYSE:TWTR) and Facebook Inc (NASDAQ:FB) are still the major players in the social media market, and still the go to setting for many businesses and notable individuals. While it was thought for a while that Twitter was stealing Facebook’s thunder, the leader in the social media sphere has bounced back from some worrying signs in recent months.
When Facebook Inc (NASDAQ:FB) was initially floated back in May, 2012, many believed that it had been grossly overvalued, and that the company would have a hard time showing any form of profit, let alone significant growth. Its share price initially halved during the first three months that it traded, and its prospects looked bleak.
But since then Facebook has been very successful in monetizing its mobile users in particular, and has really turned round its fortunes. The share price shot up between August, 2013 and March, 2014 more than tripling during this time.
Twitter Inc (NYSE:TWTR) has also had an up and down time since its initial floatation in November, 2013. At one time the company was trading significantly above its initial share price, but all those gains have since dissolved.
Today, Facebook Inc (NASDAQ:FB) remains by far the most widely used social media platform. It is said that Facebook has around 1.2 billion users, which dwarfs Twitter Inc (NYSE:TWTR) somewhat. Although Twitter is the second biggest social media platform in the world, there is still quite a significant gap between its userbase and that of Facebook, with Twitter reportedly claiming 255 million users when its financial figures were announced today.
Big boys’ fortunes differ
It is this combination of a sizeable, growing userbase and a strong model to monetarize users which has paid off for Facebook Inc (NASDAQ:FB) and left Twitter Inc (NYSE:TWTR) by comparison floundering in its wake. And financial figures released by the two companies this week didn’t exactly make comfortable reading for the hierarchy at Twitter.
Just days ago, Facebook was able to announce profits of $642m during the first quarter of 2014, comfortably exceeding the expectations of analysts. Facebook stated that it was mobile advertising behind this surge in revenue, helping their income to grow by 72 percent, to $2.5bn in the January-to-March period.
By contrast, Twitter shares have slumped to their lowest levels since its stock market floatation. Although the number of users on the Twitter platform grew slightly during the period, analysts were disappointed with the figures, and Twitter also reported a net loss of $132m for the latest quarter.
While Twitter Inc (NYSE:TWTR) is beginning to garner some significant advertising revenue, $226 million worth in the reported quarter, it is clear that they have a long way to go to achieve profitability, and a million miles to catch up Facebook Inc (NASDAQ:FB). Tweeting may be the cool activity that every teen would be lost without, but with ambitious plans to grow in emerging economies and the Third World, Facebook still very securely wears the social media crown, and will do so for the foreseeable future.
