Facebook's (FB) earnings report sent shares on a wild ride last night after the company beat on the top and bottom line but cautioned that use among young teens was flat or possibly negative during the quarter.
Potential investors in Twitter's IPO (TWTR) should be forced to look at the 15% after-hours drop in shares of Facebook before being allowed to buy a single share of Twitter. The fact that teens are dropping off of Facebook provides a stark reminder of the fleeting nature of popularity on the Internet.
Facebook has 728 million daily users and generated $2 billion of revenue last quarter. If no one ever signed up for Facebook again, the company could survive just milking the loyalists. Twitter has 1/4 as many users and will be lucky to do $2 billion in revenue over the next two years.
As my co-host Matt Nesto and I discuss in the attached video, to work as a business or investment Twitter needs to prove its users won't defect once the company starts trying to "monetize" them aggressively. Facebook is much "stickier" than Twitter.Read More »from Facebook Exposes Twitter’s Teen Trouble