Facebook Inc (FB) Did It With Mobile; Will Twitter Inc (TWTR)?


Facebook Inc (NASDAQ:FB)’s shares surged more than 14% Thursday after the company reported better than expected fourth quarter results. The world’s largest social networking company’s revenues jumped 63% year-over-year to $2.59 million, surpassing the consensus estimate of $2.33 billion. Its GAAP earnings also jumped from $64 million or 3 cents a share to $523 million or 20 cents per share.

Facebook Inc (FB) Did It With Mobile; Will Twitter Inc (TWTR)?

Facebook shows where the money is

The solid performance of Facebook Inc (NASDAQ:FB) triggered an upward swing on other social media stocks. LinkedIn Corp (NYSE:LNKD), Zynga Inc (NASDAQ:ZNGA) both went up. And Twitter Inc (NYSE:TWTR) surged 9% to a new all-time high. What pushed these stocks up? The growing optimism around mobile ads. Facebook’s results showed the strength of mobile advertising market. When the Menlo Park-based company went public in 2012, investors and analysts doubted its ability to monetize mobile users. And today mobile business accounts for more than 50% of its advertising revenue.

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Investors expect that other social networking companies, particularly Twitter Inc (NYSE:TWTR), would also benefit from mobile advertising. The San Francisco-based microblogging company is scheduled to report its fourth quarter results on February 5. MarketWatch says that investors have been even more enthusiastic about Twitter, because it’s more focused on the mobile advertising market than Facebook Inc (NASDAQ:FB).

Facebook crushed estimates – will Twitter?

Marc Poirier of the online advertising management firm Acquisio says that Twitter Inc (NYSE:TWTR) is well-positioned. They recently recently unveiled new features to target ads more specifically. Thousands of small and mid-size businesses are signing up to get their ads in the Twitter Feed. That will have a positive impact on the San Francisco-based company’s revenue. Moreover, increased competition at the auction time will push up costs for advertisers, boosting Twitter’s revenues.

Analysts say that Twitter Inc (NYSE:TWTR)’s acquisition of mobile advertising exchange MoPub is a good strategic acquisition. Stern Agee analyst Arvind Bhatia said it will help the company achieve greater scale. It will be Twitter’s first quarterly result since the company went public in November.

Facebook Inc (NASDAQ:FB) shares plunged 1.83% to $60 in pre-market trading Friday.

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