Facebook has long looked down its nose at Twitter, which it has seen as a more niche product without the wide appeal of Facebook's service. It has also thought the management team is less focused on the company's future.
Facebook director and original backer Peter Thiel once said if you threw a bomb into Twitter headquarters at 6 p.m., no one would get injured because everyone would have already gone home for the day.
Even as Twitter got more serious over time with the hiring of Dick Costolo as CEO, Adam Bain as head of revenue, and the return of Jack Dorsey, Facebook has never been particularly threatened by Twitter -- until this year.As the shift to mobile became increasingly apparent, Mark Zuckerberg realized that he needed to take some action. To his credit, he bought Instagram before anyone else could get their act together to make a move themselves. Instagram had been exploding in popularity and was completely mobile based. Zuckerberg used his high-flying stock and some cash to swoop in over an April weekend and close the deal. Instagram founder Kevin Systrom had first come up with the germ of the idea that became Instagram while an intern working for Jack Dorsey. The two were close. Dorsey exclusively used Instagram to publish his photos on Twitter. Dorsey had also begun conversations with Systrom about acquiring Instagram. But that all changed when Zuckerberg moved first. Since then, Dorsey's never used Instagram and now -- over the weekend -- word trickled out that Twitter will launch its own Instagram competitor product soon. Monday, in comments at a tech conference, Instagram founder Systrom downplayed the threat of Twitter to Instagram by saying: "Instagram is a community, not a filters app." Of course, Twitter isn't stupid. Of course, it'll go beyond "just filters" in its photo product. The company was smart to realize that the biggest thing it brings to the party is its user base. There's no sense in buying any other photo service for users because they'll be puny by comparison. Therefore, the only reason to buy someone else is for some amazing whiz-bang photo sharing product. But, frankly, there's none out there that Twitter can't do itself with the right people and sufficient focus.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Jim Cramer + 20 Wall Street pros
- Intraday commentary & news
- Real-time trading forum
- Actionable trade ideas
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV