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TheStreet Open House

Twitter or Facebook: Who Won the World Cup's Social Media Battle?

NEW YORK (TheStreet) -- Germany narrowly won the World Cup with a 113th minute strike by Mario Goetze, but the most-watched sporting event on earth remains an open contest in Silicon Valley. So when Twitter (TWTR) reports its earnings on July 29, the San Francisco-based company could win the World Cup among social media firms, upstaging its far-larger rival Facebook (FB).

In fact, it will be disappointing if Twitter can't explain to investors and analysts later this month why it was the de facto site that users and advertisers turned to during the World Cup.

Twitter is real time, it is global, and it's meant for frequent posting. Vine, the company's micro-video site, was also utilized effectively by sports fans to record the most memorable calls, coaching memes, strikes and miscues in Brazil.

Analysts have already said the World Cup will likely provide a boost to Twitter's second and third quarter earnings. But it may be new data and commentary provided by CEO Dick Costolo that may be more important for investors, who are still trying to understand Twitter's overall reach and its strengths and weaknesses as an advertising platform.

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Were Twitter to show it provided users and advertisers a far better venue than Facebook during the World Cup, it may signify to investors that the company still has strong growth prospects and may simply be navigating a transition period through slowing user growth and engagement, something Facebook struggled with in its early days on public stock markets.

If Twitter's World Cup proves unexciting, it might reinforce the notion the company has a limited reach when compared against Facebook, in addition to weak growth prospects.

Some investors already argue that to be the case. Twitter's market cap is about one-tenth the size of Facebook and one-twentieth the size of Google (GOOG). Currently, Twitter trades at a market cap roughly equivalent to LinkedIn (LNKD), a professional networking site.

Facebook Earnings

Facebook has set a beatable bar for Twitter when it comes to the World Cup, and a seemingly insurmountable climb when it comes to reach and earnings.

During the World Cup, 350 million people made over 3 billion interactions on Facebook, COO Sheryl Sandberg said during the company's earnings call on Wednesday. The World Cup final, Sandberg said, was the most-talked about sporting event in Facebook history.

Twitter, by contrast, has already said 672 million Tweets were sent related to the World Cup. But, the company may also disclose new data in its earnings, which may show an even wider reach. It wouldn't be surprising if Twitter was able to show it blew Facebook away when engaging users during the World Cup.  

Wall Street would surely take notice. Marketers crave engagement and live sports and entertainment are one of the biggest components of the overall advertising market. If Twitter is well suited for those events, it augurs extremely well for the company's future prospects.

Facebook's Sandberg said Visa (V), Nike (NKE), Ford (F) and McDonalds (MCD) all marketed heavily on the social network during the World Cup. She highlighted McDonald's "FryFutbol' campaign,  which used fries as players to re-create the top World Cup moments and reached 125 million people.

Sandberg also spoke of Facebook's new marketing efforts, which revolve around targeting for advertisers, auto-play videos, and customized audiences. Facebook's Custom Audiences' features are now used by 91 of the Ad Age 100, Sandberg said.

Was Twitter similarly prepared for the World Cup, and does the site have the same value to marketers? We'll soon find out.

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