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Friday, September 13, 2013

Twitter vs. Facebook: A Tale of Two Sites

All eyes are on Twitter as the company prepares for a highly anticipated initial public offering of stock. Twitter’s announcement on Thursday that the company had filed paperwork with regulators to eventually sell shares  immediately had analysts and potential shareholders wondering how the company would fare after Facebook’s public offering last year, which was turbulent, to say the least.

But how alike are the two social networks? Here’s a quick comparison.

Back Story: Twitter was created as a side project in 2006 as a way to share short, succinct messages with a small group of friends. Facebook, as has been told many times, got its start in a Harvard dorm room in 2004. It initially aimed to let people create personal profiles to share photos and messages with a wide network of friends.

Purpose: Twitter functions as a real-time news, entertainment and information network, tapping into the ideas and preoccupations of people who live online and the events that affect them. Facebook, on the other hand, primarily functions as the yellow pages for the Internet.

Network: Twitter has more than 200 million monthly active users, according to memos shared with staff members. Facebook has more than a billion.

Finances: By its own estimates, Twitter was profitable in December of last year and generated more than $100 million in revenue in the final quarter of 2012, according to numbers in an e-mail shared among members of its staff. These numbers could not be independently verified. Twitter is expected to post around $600 million in revenue this year and close to $1 billion next year, according to internal projections and estimates by the research firm eMarketer. Facebook reported that it generated $1.26 billion in revenue in 2012.

Revenue Sources: Both Twitter and Facebook rely heavily on a variety of advertising strategies, and mobile advertising in particular. Facebook, however, also makes money from games and other apps built on top of its platform, and it is  expected to introduce ads soon on Instagram, the company’s photo app.

Secret Weapon: This year, Twitter bought Vine, a video-sharing app, and quickly integrated it into the company. The service, which lets people craft and share six-second videos, was an immediate hit and has attracted 40 million users, according to Twitter. Last year, Facebook bought Instagram, a popular photo-sharing application, and it says the service has 150 million users. Instagram recently introduced a feature that lets its users upload videos, in addition to photos. The company said that five million videos were uploaded in the first 24 hours the feature was available.