Is Twitter Copying Facebook? - Analyst Blog

Twitter TWTR recently rolled out a new look that is quite similar to Facebook FB.  In the updated layout, user profiles have been shifted to the left thus making room for large header images at the top of the profile. Also, users can now customize their header images, akin to the Cover Photos feature in Facebook.

Moreover, the new profile pages will highlight the tweets that have received the highest response in the form of retweets. Additionally, the new layout will also enable users to pin their favourite tweets to the top of their respective profile pages.

Further, the new design will also enable people to filter tweets of other users. This would provide greater flexibility to users and enhance customer satisfaction, thereby driving growth and profitability going forward.

Initially this new layout will be offered to a few users only. These users will have their new design turned on automatically provided they access Twitter via desktops. It is worth noting that the new layout will not be available on smartphones and tablets.

We believe that the small the screen space of smartphones and tablets compared to desktops prevented Twitter to launch the new layout on these devices. Since, 76.0% of users access Twitter through mobile devices this strategy will limit the new layout's growth prospects.

In order to enhance user engagement, Twitter has been trying new initiatives, which often have similarities with Facebook. Earlier in Mar, 2014, Twitter replaced the “Retweets” option with “Share” and “Share with Followers”. Reportedly, these changes have failed to impress Twitter users.

Moreover, Facebook too had tried to copy Twitter's Vine when it integrated video into Instagram. Nonetheless, both the platforms are trying hard to gain user attention through frequent launches of new features, which are sometimes hard to distinguish.

We believe that the two platforms are intending to follow different paths in the near term. While Twitter wants to go beyond providing news and public information, Facebook is juggling with news apart from being a platform for connecting with friends and family.

However, the intensifying competition for attracting advertising dollars is expected to hurt Twitter, due to the growing popularity of Facebook's Instagram among U.S. smartphone users.

Nevertheless, we believe that Twitter's recent initiatives that include the tagging of photos for Apple's AAPL iOS and Google's GOOG Android devices will increase customer engagement going forward.

Currently, Twitter has a Zacks Rank # 3 (Hold).