Since Microsoft Corporation (MSFT) announced its huge $26 billion buyout of LinkedIn Corp (LNKD) on June 13, Twitter Inc (TWTR) stock is up 15.5% on market speculation that it will be the next big buyout.
But while Apple Inc.(AAPL), Alphabet Inc(GOOG, GOOGL) andFacebook Inc (FB) are all rumored buyers, none of them will be making bids for TWTR anytime soon.
TWTR Users Are Not LNKD Users
First of all, it’s important to understand what MSFT got in LNKD. Yes, LinkedIn and Twitter are both social media companies with massive user bases. LNKD has roughly 433 million users and TWTR has about 1.3 billion registered users.
Unfortunately, only about 310 million of those Twitter users were classified as monthly active users (MAUs) as of Q1.
Still, that’s a lot of potential exposure for a buyer.
But not all social media subscribers are equal. In fact, LNKD and TWTR stock represent the opposite ends of the spectrum when it comes to generating advertising revenue.
Social media is all about advertising, as FB has proven. Each active LNKD user generates roughly $8 in ad revenue per year. The average Twitter user, on the other hand, generates less than $2 per year in ad revenue.
TWTR Stock Has Little to Offer
TWTR stock has…
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