Twitter (TWTR) CFO Makes A Great Case For Twitter’s Audience

Twitter Inc (NYSE: TWTR)

Twitter has been dealing with issues for quite some time now with regard to their user base. However, recently, the company’s CFO has started to urge investors to look at users in a different light. In fact, he makes a compelling argument that Twitter’s user base, when looked at properly, could be larger than that of Facebook Inc (NASDAQ: FB). Today, we’ll talk about the argument made for Twitter’s user base and whether or not there is any validity to the claims that Twitter’s following is likely bigger than Facebook’s. So, let’s get right to it…

Twitter’s Argument With Regard To Users

As mentioned above, Twitter’s CFO, Anthony Noto, is hoping that investors will start looking at different metrics when gauging the effectiveness of social media. As a matter of fact, Noto argues that Twitter’s audience may be bigger than the audience at Facebook and, when you listen to the argument, it makes sense. Noto argues that when it comes to Twitter, investors can’t simply look at active users as the metric for audience. As a matter of fact, he says that Twitter’s tweets are being seen in search engines, news platforms, and more – all of which increases the audience of the social network. He has even gone as far as to say that Twitter’s true audience likely surpasses the 1.49 billion-strong Facebook audience.

Is There Any Validity To The Claims Made By TWTR’s CFO?

In my opinion, this is a very hard question to answer. The best way to answer it is “Yes… and no.” Here’s the way I see it…

  • There Is Validity – If you look at the amount of consumers that are viewing tweets via news outlets, search engines and other forms of media, there is validity to the claims. With firehose feed access being given to Google, tweets are popping up in Google more now than ever before expanding the audience. Also, from what I’ve seen in the news media, tweets tend to be embedded far more than Facebook posts.
  • On The Other Hand, This Really Isn’t Valid Data – Another thing we need to take into account, however, is profitability of the audience. Sure, Twitter may have just as many people viewing tweets as Facebook has viewing posts, but when you look at profitability, there’s still a big difference. You see, Twitter can’t insert ads into search engine results to earn money from their tweets and they can’t do it on news outlets either. So, while they may have a massive audience viewing their tweets, the audience they can actually make money from is still incredibly small when compared to Facebook; in all reality, that’s the audience that investors care about!

Final Thoughts

The bottom line is that it’s not important for investors to pay attention to stats that won’t yield a profit. Therefore, the only audience that truly matters is the audience that actually goes to Twitter to read the tweets. All in all, I can see why Noto wants investors to look elsewhere, but I think that investors are smart enough to look at the real stats. After all, my website is viewed millions of times per month in search, but only about 250,000 people actually click through. So, my true audience is about 250,000 a month; that’s no different for Twitter!

What Do You Think?

Does it matter that people are viewing tweets via search and news media? Why or why not? Let us know in the comments below!

[Image Courtesy of ABC News]


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