As Facebook stumbles, Twitter and Snapchat show new life

Facebook and Google cemented their dominance over digital media in 2017. But small cracks may be forming.Snapc...

Posted: Feb 10, 2018 7:26 AM
Updated: Feb 10, 2018 7:26 AM

Facebook and Google cemented their dominance over digital media in 2017. But small cracks may be forming.

Snapchat and Twitter both showed signs of long-awaited turnarounds this week, with analysts suggesting their businesses may be benefiting from concerns about Facebook's impact on users and society.

The two companies, thought to be on the ropes at various points last year, surprised Wall Street this week with stronger than expected sales for the final three months of 2017. Snap showed renewed user growth; Twitter turned a profit for the first time.

Snap, the parent company of Snapchat, surged nearly 50% on Wednesday, pushing the company above its IPO price for the first time since July. Twitter is now trading above $30 a share for the first time since 2015.

Facebook's stock, on the other hand, is down slightly this year. The company rattled investors by tweaking News Feed to show less content from publishers and brands. It also revealed users are spending less time on the social network as it chooses to show fewer viral videos.

Both issues are the result of Facebook trying to address its questionable impact on the world. Facebook has faced a groundswell of criticism for enabling fake news, filter bubbles, foreign election meddling and social media addiction.

Now, some industry watchers are revisiting their assumptions about whether Facebook and Google will continue to run away with the online advertising market.

"We might need to rethink... whether digital advertising really is going to trend towards a duopoly," James Cordwell, an analyst with Atlantic Equities, told CNN Tech. "That still looks like the most likely outcome, but the results... certainly give one pause for thought."

In addition to Snap and Twitter, Cordwell noted that Amazon's ad sales business appears to be growing fast too. Amazon's "other" revenue, a category that includes advertising, grew 62% year-over-year to $1.7 billion.

Related: Twitter just had its first profitable quarter

Facebook and Google have dominated the online ad market for years thanks to their massive reach and vast amounts of data. The companies are estimated to have gobbled up more than 60% of digital ad spending in 2017.

Advertisers and publishers have long hoped for a viable third alternative to combat the tremendous leverage that Facebook and Google have over them. Now Facebook may inadvertently be helping the cause.

"What we didn't factor in were users being equally desperate for alternatives," James Cakmak, an analyst with Monness, Crespi, Hardt & Co., wrote in an investor note this week about Snap's improved user growth. "The backlash against Facebook may very well have played a factor."

Snap CEO Evan Spiegel has previously played up the societal concerns about Facebook to his advantage, without actually naming names.

While announcing a Snapchat redesign in November, Spiegel said other social media platforms "fueled 'fake news' because content designed to be shared by friends is not necessarily content designed to deliver accurate information."

Twitter, along with Google's YouTube, has also come under scrutiny for spreading fake news and Russian propaganda, but Facebook has arguably endured more of the criticism by virtue of its unmatched size.

Daniel Ives, an analyst with GBH Insights, wrote in an investor note Thursday that Facebook's decision to tweak the News Feed may prove to be a "tailwind" for Twitter's advertising business.

Facebook's move "is forcing publishers and online advertisers to 'dip their toe in the water' on the Twitter platform and start to ramp up ad investments on this platform," Ives said.

For now, though, Facebook remains miles ahead.

Facebook has grown to more than two billion monthly users, while Twitter is stalled at 330 million. Facebook has 1.4 billion daily users, while Snapchat has 187 million. Facebook's $40 billion in annual sales last year was more than ten times the sales brought in by Twitter and Snap combined.

But this week may be a reminder not to count the little guys out just yet.

Minnesota Coronavirus Cases

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Confirmed Cases: 139444

Reported Deaths: 2440
CountyConfirmedDeaths
Hennepin34988995
Ramsey14471364
Dakota10132138
Anoka9160153
Washington623372
Stearns608248
Scott354934
Olmsted335930
St. Louis314271
Wright265315
Clay246443
Nobles231918
Blue Earth20857
Carver18677
Kandiyohi17835
Sherburne176322
Rice168310
Mower153918
Winona129619
Chisago11142
Crow Wing108322
Benton10099
Lyon10076
Waseca9419
Beltrami9278
Otter Tail9217
Todd8726
Morrison8029
Steele7873
Polk7864
Itasca77117
Nicollet75618
Douglas7344
Freeborn7004
Le Sueur6516
Goodhue63311
Martin61918
McLeod6154
Becker6044
Isanti5835
Watonwan5814
Pine5630
Carlton4832
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Mille Lacs43216
Hubbard4233
Cass4055
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Rock3555
Meeker3483
Brown3353
Roseau3000
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Murray2913
Cottonwood2900
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Renville26313
Sibley2623
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Kanabec23010
Houston2201
Jackson2191
Swift2122
Pennington2091
Unassigned19553
Lincoln1910
Aitkin1882
Stevens1861
Koochiching1765
Pope1650
Big Stone1531
Lac qui Parle1453
Wilkin1424
Marshall1371
Lake1290
Clearwater1281
Mahnomen1282
Norman1280
Grant1024
Red Lake822
Traverse580
Kittson500
Lake of the Woods451
Cook180

Iowa Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 119931

Reported Deaths: 1677
CountyConfirmedDeaths
Polk19440289
Woodbury735998
Johnson596531
Black Hawk5862102
Linn5823132
Dubuque538358
Scott474442
Story408218
Dallas352547
Pottawattamie333245
Sioux249817
Buena Vista227912
Marshall209036
Webster192315
Plymouth170331
Wapello157362
Clinton151627
Muscatine151258
Des Moines147310
Cerro Gordo146127
Crawford137014
Warren12947
Carroll118913
Jasper115034
Henry10955
Marion104811
Tama98637
Lee98311
Delaware81713
Dickinson7769
Wright7481
Boone7369
Mahaska72824
Bremer7029
Harrison68415
Washington67711
Jackson6623
Benton6222
Lyon5598
Clay5474
Louisa53415
Winnebago50619
Winneshiek4969
Cedar4947
Hardin4887
Kossuth4850
Hamilton4794
Buchanan4755
Poweshiek47211
Jones4704
Clayton4613
Floyd45211
Emmet44620
Iowa4299
Page4190
Guthrie41315
Mills4133
Cass4123
Cherokee4112
Sac4074
Butler3963
Franklin39318
Shelby3932
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Allamakee3879
Madison3713
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Humboldt3503
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Grundy3326
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Taylor2522
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