What Twitter Has Failed To Learn From Facebook

It seems Twitter Inc TWTR has taken the opposite path of Facebook Inc FB post its IPO. Whereas Facebook has moved from strength to strength to be the social media behemoth that it is today post its IPO, Twitter is showing continued weakness since its IPO, which was again highlighted by Dick Costolo stepping down as CEO of the company on Thursday.

Neil Campling, global TMT analyst at Aviate Global, was on CNBC recently to discuss what Facebook has done right that Twitter couldn’t and how Twitter’s problems make Facebook an even more compelling buy.

Understanding The Need For Scale

On what has Facebook done well that Twiter failed to do, Campling said, “For one thing they have kept the most important people in the company…Zuckerberg still runs that company and it and has a great sort of lieutenants around him. Sheryl Sandberg is obviously a superb COO.

Campling went on, “But what they have done in particular, I think, is they have understood the need for scale, they have understood the need for monetizing the opportunity they have and clearly they have also made some great acquisitions and Twitter really has not moved on since its IPO.”

Facebook Is A Buy

Campling was asked that with all the management transition going on at Twitter, does that make Facebook a better buy at this point. He replied, “Absolutely, you buy Facebook based on the fundamentals. People often talk about declining usage on Facebook occasionally quarter to quarter sometimes among the younger generation.”

“Where they are going instead? They are going to Instagram. Who owns Instagram? Facebook. What did they pay for Instagram? Just $1 billion. If SnapChat is getting funding on $16 billion, it just goes on to show that Instagram at $1 billion was an absolute bargain.