Facebook Inc (NASDAQ:FB) and Twitter Inc (NYSE:TWTR) stocks surged to new heights on Monday as investors’ expectations increased regarding advertising revenue. The largest social networking site added almost 5% to $57.77 and Twitter gained almost 8% to $64.54. The stock price of Facebook has increased almost two fold this year while Twitter’s share price has almost doubled since its initial public offering, says a report from LATimes.
Retargeting, a new revenue model for Facebook, Twitter
According to research firm EMarketer, both companies are trying to ramp up their share in the digital market. It is expected that by 2015, Facebook Inc (NASDAQ:FB) would grab 9% market share compared to 5.9% in 2012 while Twitter Inc (NYSE:TWTR) would snag 2.2% compared to 0.6%.
Cantor Fitzgerald analyst Youssef Squali echoed similar views on Facebook by increasing the price target to $65 as the company almost doubled advertising in the user’s news feed during the holiday season.
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Social networks like Facebook and Twitter Inc (NYSE:TWTR) have initiated a new mode of advertising by targeting users with ads for the products they browse online. The latest ad strategy is known as “retargeting,” which is expected to prove highly beneficial for the social networking sites, but at the same time may raise privacy concerns.
Users have mixed reactions
Earlier, an entrepreneur from Santa Clarita, Tania Mulry said that many users are discussing the series of retargeting ads. A student of Mulry said that she was scared after seeing that the swim suit she browsed on Nordstrom.com was displayed as an ad on her Facebook page.
“As a consumer, seeing something you were looking at recently on another site is eye-catching, and then the deep sense of creepiness sets in like an ominous fog and you realize that big companies are watching what you do online,” Mulry said.
Some users are comfortable with the idea of retargeting and are aware of the fact that the items they are browsing on the internet are being watched by marketers, which will be shown to them when they log in their social networking page. However, according to some it is annoying to realize that the website they browsed is displayed on Facebook Inc (NASDAQ:FB).
According to the analysts, these ads would be popular with the marketers and the social networking sites as they are under pressure from investors to earn more revenue from advertising.