Skip to main content

Is Twitter's audience really bigger than Facebook's? Depends how you measure

Is Twitter's audience really bigger than Facebook's? Depends how you measure

/

CEO Dick Costolo has a complex argument about Twitter's true size, but Wall Street's not buying it

Share this story

If you buy something from a Verge link, Vox Media may earn a commission. See our ethics statement.

Twitter announced its third quarter earnings yesterday and investors didn't like what they saw, driving the stock down around 10 percent. The company's lack of profits and slowing user growth has marred its relatively strong financial performance over its first year as a public company. On the call that followed, CEO Dick Costolo said the company's goal was to have the largest audience in the world. He laid out his vision for measuring the true size of Twitter, trying to give Wall Street a narrative they could rally behind — and it was a doozy.

"Geometrically eccentric circles."

"You should think about the size of our total audience as a series of geometrically eccentric circles," Costolo explained. (He may have meant concentric circles, but he said "eccentric circles" twice during the course of the call.) At the center of this geometric oddity are the 284 million monthly active users who log in to Twitter. Beyond that, Costolo’s logic goes, is a second circle of people who come to Twitter every month and read tweets, but don't log in. That group is roughly 1-2 times the size of its logged-in audience, says Costolo. Beyond that is an even larger group of people who consume tweets when they see them embedded in web pages and syndicated on television.

Add all those numbers up and you get an audience that is equal to or larger than the 1.3 billion people who use Facebook every month. Costolo would like investors to believe that is a huge untapped opportunity for growth in Twitter's business, but so far they aren't buying it. The stock is currently sitting slightly above its IPO price and well below its record high in January of this year. Still, there may be real upside behind the company’s fuzzy math.

Right now, people who are not logged into Twitter don't see ads. People who are logged in but are using Twitter on third-party apps, or even Twitter’s own TweetDeck, also don't see ads. Costolo says all that will change. "We will think about and look for opportunities to provide our native advertising units in syndication, both to other Twitter-based properties, like TweetDeck, and across the entire mobile application ecosystem."

Can Twitter make money every time you read a Tweet, even if you don't have a Twitter account?

The company just rolled out a new mobile developer platform, Fabric, which it hopes will encourage lots of new apps to show its tweets in a way that can make Twitter money. Costolo said there are already over 10,000 developers using Fabric, reaching more than one billion iOS and Android users collectively. Twitter has plans to help those developers make money against all those tweets through MoPub, a mobile ad exchange it acquired last year.

CFO Anthony Noto pointed out that a lot of people who end up at Twitter’s site but aren't logged in have arrived because they searched for a specific person or topic on a major search engine like Google or Bing. Right now Twitter doesn't make any money off of them, but Noto emphasized that there is quite a bit of user intent Twitter can measure there — just as Google does during a search — something that advertisers value.

Twitter makes an average of roughly $3-4 per user, well below Facebook and Google. But Noto thinks that can improve drastically. "We see nothing structurally preventing us from reaching the monetization levels of our industry peers," he argued on the earnings call, citing $10 per user as a goal.

My father uses Twitter every day, but never tweets a word

As a rabid Twitter user, I watched with interest when my father, who is over 60 years old and retired, began experimenting with the service. He started out browsing it without logging in, just checking the timelines of some newsmakers he finds interesting. That went on for nearly a year. After a while he began using it often enough that it was worth creating an account, but I'm not sure he would have done it without me around to help him set it up.

I don't think he's ever written a single tweet, but he now checks it at least once a day when he's home on his computer. For him, Twitter delivers ideas, jokes, and links from people he respects and admires. Twitter’s big argument is that they can monetize folks like my dad earlier, and do more to ensure they bring him fully into the fold.

If the company could succeed at that, would it achieve Costolo’s long term goal of the largest audience in the world? Facebook will likely continue to be much larger than Twitter in terms of its logged-in user base, but the vast majority of the activity that happens on its platform is private. Twitter has always been a very public network, which means a lot of people are going to get value out of it without having to sign up. The big question for Twitter is whether or not it can get value back.

Today’s Storystream

Feed refreshed Two hours ago Midjourneys

E
External Link
Emma RothTwo hours ago
Celsius’ CEO is out.

Alex Mashinsky, the head of the bankrupt crypto lending firm Celsius, announced his resignation today, but not after patting himself on the back for working “tirelessly to help the company.”

In Mashinsky’s eyes, I guess that means designing “Unbankrupt yourself” t-shirts on Cafepress and then selling them to a user base that just had their funds vaporized.

At least customers of the embattled Voyager Digital crypto firm are in slightly better shape, as the Sam Bankman-Fried-owned FTX just bought out the company’s assets.


M
Twitter
Mary Beth GriggsTwo hours ago
NASA’s SLS rocket is secure as Hurricane Ian barrels towards Florida.

The rocket — and the Orion spacecraft on top — are now back inside the massive Vehicle Assembly Building. Facing menacing forecasts, NASA decided to roll it away from the launchpad yesterday.


A
External Link
Andrew J. Hawkins1:30 PM UTC
Harley-Davidson’s electric motorcycle brand is about to go public via SPAC

LiveWire has completed its merger with a blank-check company and will make its debut on the New York Stock Exchange today. Harley-Davison CEO Jochen Zeitz called it “a proud and exciting milestone for LiveWire towards its ambition to become the most desirable electric motorcycle brand in the world.” Hopefully it also manages to avoid the cash crunch of other EV SPACs, like Canoo, Arrival, Faraday Future, and Lordstown.


A
The Verge
Andrew Webster1:06 PM UTC
“There’s an endless array of drama going on surrounding Twitch right now.”

That’s Ryan Morrison, CEO of Evolved Talent Agency, which represents some of the biggest streamers around. And he’s right — as you can read in this investigation from my colleague Ash Parrish, who looked into just what’s going on with Amazon’s livestreaming service.


R
The Verge
Richard Lawler12:59 PM UTC
Green light.

NASA’s spacecraft crashed, and everyone is very happy about it.

Otherwise, Mitchell Clark is kicking off the day with a deeper look at Dish Network’s definitely-real 5G wireless service , and Walmart’s metaverse vision in Roblox is not looking good at all.


J
External Link
Jess Weatherbed11:49 AM UTC
Won’t anyone think of the billionaires?

Forbes reports that rising inflation and falling stock prices have collectively cost members of the Forbes 400 US rich list $500 billion in 2022 with tech tycoons suffering the biggest losses.

Jeff Bezos (worth $151 billion) lost $50 billion, Google’s Larry Page and Sergey Brin (worth a collective $182b) lost almost $60b, Mark Zuckerberg (worth $57.7b) lost $76.8b, and Twitter co-founder Jack Dorsey (worth $4.5b) lost $10.4b. Former Microsoft CEO Steve Ballmer (worth $83b) lost $13.5b while his ex-boss Bill Gates (worth $106b) lost $28b, albeit $20b of that via charity donations.


T
Thomas Ricker6:45 AM UTC
Check out this delightful DART Easter egg.

Just Google for “NASA DART.” You’re welcome.


R
Twitter
Richard Lawler12:00 AM UTC
A direct strike at 14,000 mph.

The Double Asteroid Redirection Test (DART) scored a hit on the asteroid Dimorphos, but as Mary Beth Griggs explains, the real science work is just beginning.

Now planetary scientists will wait to see how the impact changed the asteroid’s orbit, and to download pictures from DART’s LICIACube satellite which had a front-row seat to the crash.


M
The Verge
We’re about an hour away from a space crash.

At 7:14PM ET, a NASA spacecraft is going to smash into an asteroid! Coverage of the collision — called the Double Asteroid Redirection Test — is now live.


E
Twitter
Emma RothSep 26
There’s a surprise in the sky tonight.

Jupiter will be about 367 million miles away from Earth this evening. While that may seem like a long way, it’s the closest it’s been to our home planet since 1963.

During this time, Jupiter will be visible to the naked eye (but binoculars can help). You can check where and when you can get a glimpse of the gas giant from this website.