Boston, MA, 04/11/2014 (usastockreport) – After Facebook Inc (NASDAQ:FB), Twitter Inc (NYSE:TWTR) was one of the most talked about IPO on the street. Twitter post IPO is somehow following a similar trajectory as Facebook did post its IPO. Twitter’s stock is down by almost 33% this year and may soon hit post IPO lows. The company that is yet to post any profit is struggling hard to justify its over $29 billion market capitalization. Though advertisers are still more optimistic about using Facebook as preferred marketing medium, new product launches by Twitter might soon turnaround fortunes for Twitter.
War with Facebook
Facebook Inc (NASDAQ:FB) has maintained a clear lead over Twitter in terms of preference given by marketers, however, given that Twitter is not as mature as Facebook is Twitter’s strategies to tackle the dominance of Facebook looks attractive. According to various surveys over 90% marketers agree that their companies use Facebook as an advertisement medium, while only 23% said they used Twitter to advertise. Facebook also leads in terms of Revenue per Visit. RPV for Q4 2013 of Facebook stands at $1.22 while, for Twitter, it was $0.81. Also the cost of acquiring a new customer via Twitter is quite high when compared to Facebook. Cost of acquiring a new customer using ads on Twitter is around $20 while acquiring a new customer using Facebook ads costs just around $4.
According to WSJ news report, in next six months Twitter will launch 15 new ad products. Twitter’s card is allowed advertisers to expand their tweets to include promotional material and links. New app-install ads will enable marketers to put direct application download link in a tweet. This app-install feature will give Twitter a competitive edge against Facebook, as 245 million apps were downloaded last year from their news and advertisements in Facebook feeds.
Growth has not been a problem for Twitter Inc (NYSE:TWTR) with an 110% increase in Q4 2013 revenue, top-line of the company is expected to swell. The major point of contention for investors is that company is yet to make any profit. With the given new products pipeline, we expect that company will be profitable soon and can recreate Facebook Inc (NASDAQ:FB) magic on the street.