While Facebook Inc (NASDAQ:FB) is diversifying in to IOT, AI for next generation of growth, Twitter Inc (NYSE:TWTR) seem to be stuck in the old era and might miss on the next big opportunity. Though Twitter sales have clocked 88% growth over past five years Twitter Inc (NYSE:TWTR) continued dilution of shares of all its shareholders raises concern.
Twitter Inc (NYSE:TWTR) needs to diversify from purely ad-supported businesses. Majority of Twitter Inc (NYSE:TWTR) revenue heavily depends of advertising sales. Facebook Inc (NASDAQ:FB) also seems to have peaked its advertisement revenue stream. Facebooks is yet to find a way to monetize WhatsApp which boosts over a billion people. WhatsApp is especially popular in Asia where the ad revenue per advertisers would be less. We may slowly start seeing roll out ads to select few to see how the user response is.
Driving growth sole by advertising sales would be difficult as Twitter Inc (NYSE:TWTR) needs to find balance between advertisements and not cluttering UI to keep users satisfied. In contrast Facebook Inc (NASDAQ:FB) has been slowly diversifying its dependency on ad based revenue. Recognizing the future wave of technology change Facebook has been working on IOT, AR and Bots to drive its next generation of growth. Facebook Inc (NASDAQ:FB) is also working on a standalone video chat device with speakers. This home-based video chat device is seen by analysts as a major move. In the recent quarter Facebook ad revenue has grown over 45% year-over-year.
Twitter Inc (NYSE:TWTR) management has hinted that it does not hope to see increase in ad revenue until next year. In The past two quarters Facebook’s (NASDAQ:FB) management also has warned investors of slowdown in revenue. Growth in Facebook ad revenue has slowed down by 49% compared to same quarter previous year. While Facebook saw its user growth increase, Twitters user base declined by over 2 million in US which is one of the key user markets.