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Could This Business-Model Tweak Create a Better Social Media Investment Than Facebook?

By Brian Stoffel and Brian Feroldi – Oct 16, 2021 at 6:00AM

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Advertising is great. This could be even better.

When Twitter (TWTR) went public in 2013, expectations were sky-high. Facebook (META 23.28%) had just recently entered the public markets, and investors were starting to get a taste for just how lucrative digital advertising could be for social media stocks. Since January 2014, Facebook has turned a $1,000 investment into $5,000. Twitter is in the exact same place it was seven years ago.

That's pretty disappointing. The fact that Twitter's user base pales in comparison to Facebook's is one reason (of many) that the investing results have diverged so much. But recently, the company began introducing products that could diversify revenue streams and turn users (instead of advertisers) into revenue generators. In this video, recorded on Oct. 2, Motley Fool contributors Brian Feroldi and Brian Stoffel break down the effect these changes could have, and how they fit into the overall bull and bear case for Twitter. At the end, they also reveal how the company scores on their frameworks.

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Brian Stoffel has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Facebook and Twitter. The Motley Fool has a disclosure policy.

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