With over 1.28 billion daily active users and 1.94 billion monthly active users, Facebook is the most widely used social media platform in the world. As such, Facebook is also the most popular platform among marketers and advertisers and hosts at least 5 million advertisers on Facebook and 1 million more on Instagram. This popularity with advertisers is bolstering Facebook’s financial growth.
Facebook’s 2017 Q1 earnings report reveals that nearly 98% of its $8.032 billion Q1 revenue came from advertising options. Despite reported dips in Q1 revenue, Facebook’s common stock is still standing strong at all-time highs.
Even though Facebook’s Q1 2017 revenue was lower than that of Q4 2016 (and history suggests that stock prices drop every time first-quarter earnings reports show revenue lower than the preceding fourth quarter), Facebook’s common stock is still standing strong at all-time highs.
As long as Facebook’s user base continues to grow, advertisers will still continue to buy native ads, meaning Facebook’s revenue will continue to see growth each quarter.
New advertising products and partnerships, such as livestreaming ads and paid social media influencer content, as well as Facebook’s original programming plans, look to secure growth in the coming quarters.
Twitter is not experiencing the same success. While revenue changes have been positive, Twitter is still struggling with turning a profit and is contending with plummeting common stock prices. Activity on the platform is also diminishing, with daily active user growth and monthly active user growth stagnant or declining in recent quarters.
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Both Facebook and Twitter started off in similar financial positions in their first quarters after IPO. Both saw massive gains in revenue, at least a 30% increase in daily active users from the year before, and overall losses. However, the two companies’ paths diverge from there.
Facebook’s focus on the user experience has made the social platform more relevant to users and advertisers more than ever. Twitter’s slowly growing audience and poor monetization strategies, on the other hand, have made Twitter a pain in investors’ portfolios.