We all know of Facbeook’s IPO failure, but will Facebook join these ranks as well? Slowing revenue this year as well as a lack of advertising revenue outside the United States are posing problems for the social networking giant. Twitter also has a significant variable cost for its servers. Because of its real-time platform its servers are susceptible to crashes during large-scale news events. It becomes apparent that if revenue is decreasing and costs are increasing, profit itself it decreasing as well.
Financial gurus debunk Twitter’s success and clip its wings.
My opinion, Facebook will soon have another friend, Twitter, because a service that relies on advertising revenue and is failing in a majority of it’s consumer segments is not a company investors will be convinced to invest in. Twitter seemed like a good candidate for investing but a peak into their recent financial statements have brought more concern than joy. Within the United States, Twitter works, but the lack of an international market has financial gurus like Kai Li of UBC shaking their heads.
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