Facebook Inc (NASDAQ:FB) makes money for itself while getting people’s attention for advertisers while Twitter Inc (NYSE:TWTR) just gets people’s attention, Jim Cramer suggested in a recent discussion on CNBC.
The comparison was made by Cramer as the two companies were compared ahead of the opening bell on Monday at the New York Stock Exchange. Cramer hinted during the discussion that investors may do better by putting money in Facebook Inc (NASDAQ:FB) stock than if they were to invest in Twitter Inc (NYSE:TWTR).
According to Cramer, a report that has just recently been released says that advertisers are loving Facebook Inc (NASDAQ:FB) and that the U.S. minutes for the social networking site is increasing 42%. The CNBC host then went on to say that when he speaks to executives, he observes that they “throw” money on the world’s largest social networking site and say that they love the return of investment the company makes for them especially regarding reaching out to a younger audience.
Another report, Cramer added, said that Twitter Inc (NYSE:TWTR) month average engagement is actually going to “disappoint”. He noted that the social network does not trade on earnings, because it does not have any, but on monthly average users. He also added that when he speaks to CEOs, they say that advertisers do not have to really pay the company because they get a lot of exposure anyway even without buying services the company offers. This means, Cramer said, that companies are not really investing in Twitter but they are getting “eyeballs” from using the platform to promote their services or products.
Cramer said that Facebook Inc (NASDAQ:FB) and Twitter Inc (NYSE:TWTR) are different. People love that Twitter is a great news source while advertisers love that Facebook gives them a great return on investment. The bottom line, however, is that while Facebook is getting paid, Twitter is not.
Watch the whole discussion below.
Facebook Inc (NASDAQ:FB) shareholders includes Beeneet Kothari’s Tekne Capital Management which reported 649,900 shares in the company by the end of March. Another shareholder is William C. Martin’s Raging Capital Management with 647,000 stocks.
Twitter Inc (NYSE:TWTR) investors includes Christopher Lyle’s Scge Management with 129,674 shares in the company by the end of the first quarter. Anna Nikolayevsky’s Axel Capital Management is also an investor with 59,000 shares in the company by the end of the same period.