The Year of Twitter, the Fear of Facebook
On clown cars and gold mines
To many, what I’m about to say will sound crazy. Bear with me for just a thousand words or so. I think Twitter is going to have a good year in 2018, while Facebook has a bad one.
I know, I know. One company has basically been the proverbial “clown car driven into a gold mine” for the past several years. Except minus the gold mine part. The only entity that puts a foot in its own mouth more than Donald Trump on Twitter may be Twitter itself.
Meanwhile, its once peer/rival, Facebook, has two billion active users. Basically, most of the planet that is on the internet is using Facebook. I feel like we’ve all grown numb to just how insane this is. But it is insane. And as a result, Facebook is now one of the most highly valued companies in the world. And, perhaps even more insane: still growing.
The two companies could not stand in more contrast to one another when it comes to apparent trajectory and execution. And yet. I just have this feeling that we’re approaching the end of the Age of Facebook. And I continue to believe Twitter is highly underrated, if not undervalued. And I think 2018 may be the year this flips, even if just a bit.
I base this on nothing other than gut feeling. But I like to note down such gut feelings to link back to when I’m right. (And to conveniently forget when I’m wrong.)¹
As fate would have it, Facebook is kicking off 2018 by going through an existential crisis of sorts. Driven, it would seem, by the backlash against the 2016 election and the fake news phenomenon, Facebook is trying to go back to the basics. Mark Zuckerberg wants the network to be about friends and real connections, not about “professional” Newsfeed-bait. Of course, Facebook says such things every few years. And yet the song remains largely the same.
I’m honestly not sure much will change other than when Facebook says “jump”, publishers will ask “how high?” and the answer will be “higher” — in terms of ad spend, that is.
Look, I’m the person who told you — quite publicly — I was buying Facebook at $19/share. That was a good call — Facebook is currently hovering closer to $190/share. The market was being stupid.² I give no such advice here, other than to say I feel like Facebook has lost the plot.³ And to point out that with enough time, every company loses the plot. And I’m not sure Facebook won’t ultimately be proven to have simply lost it faster — just as it found it faster!
There are, of course, caveats galore here. First and foremost, Instagram. I could not be more bullish about that network. And I think buying it will go down as the smartest move Facebook ever made. I think we’re just at the tip of the iceberg Instagram will become. And I think it’s not entirely insane to think that it could be bigger than Facebook itself in a few years.⁴
The same is true, to a different extent, with WhatsApp. It’s a completely different network and market. But it still seems like a smart deal given the sheer scope. Facebook Messenger (which people forget also started as an acquisition), is also solid, bad experiments, aside. Oculus? We’ll see…
So when I’m talking about Facebook, I’m talking about Facebook’s core — its own social network.⁵ The thing that has become a hodgepodge of features no one asked for, but that Facebook will experiment with because, well, they’d be stupid not to with two billion eyeballs to play with.
Twitter, on the other hand, has never really found the aforementioned plot. And that’s despite seemingly having the script right in front of them for most of their existence. But it feels like the past year or so has been about laying the groundwork for finally finding it — and I’m saying that not just because they had me over for lunch one day. I do believe the pieces are almost in place for something special. 2018 will be about execution. Which isn’t a joke, I swear!
Of course, Twitter has a big caveat of its own. Yuge, even. And we might spend 2018 just hoping he only ruins Twitter, and not the entire planet.
Ironically, what may end up hurting Facebook in 2018 is what may enable Twitter to gather steam. Facebook’s business is an absolute juggernaut. But it’s almost entirely ad-based. Twitter’s business is largely the same, but it’s far from a juggernaut. And so the latter has more room to experiment, maneuver, and be generally nimble. Facebook can — and will — jack up ad rates, but it will not be able to change what it fundamentally is. They can launch all the $500 gadgets they want. Local news? Okay. This is not what Facebook is.
Just what exactly Twitter is, is still largely undefined. This has been a massive weakness over the past several years. But if they can flip this into a strength this year with the continued advertising backlash… well, that’s at least interesting. Again, potentially!
I know just how risky such a prediction is to make. Made any other year in the past decade, this prediction would have been laughable. But something feels different as we embark on this new year. Buy low, sell high and all that. Might Twitter’s clown car finally find its way to Facebook’s gold mine?
¹ But someone else will call me out on this, surely :)
² Here’s where I’ll disclaim that I own a small amount of shares in both Facebook and Twitter. So hopefully my conflicts cancel out. But seriously, this is not investment advice!
³ For the record, I do believe the push to make Facebook more about social interactions once again and less about content is the right call. I just don’t believe it will make Facebook all that different than it is right now — again, we’ve heard this all before, many times.
⁴ As an aside, how on Earth did Facebook not build Google Photos before Google did? They had all the photos already. But there’s almost no product around them. It’s dumbfounding.
⁵ Speaking of, how awful is the actual website version of Facebook these days? It’s basically now the Microsoft Office of social software — I suppose in good and bad ways. It looks like shit, is a minefield of menus, but you have to use it.
