Slowing user growth

Facebook, Inc. (FB) continues to be the leading social network in terms of monthly active users (or MAU). Google+ (GOOG)(GOOGL) and Twitter Inc (TWTR) follow Facebook in this space, as the chart below shows. Meanwhile, all of these social networks are experiencing slowing MAU growth.

Facebook’s MAU increased from 1.32 billion in 2Q14 to 1.35 billion in 3Q14, a sequential increase of only 2.5%. Twitter, on the other hand, managed to increase its MAU from 271 million to 284 million during the same time period. Incidentally, investors punished Twitter’s stock mainly because of the disappointing MAU growth. For more on this, read Why did Twitter’s stock fall more than 10% after its earnings release?

Why Facebook beats Twitter on user engagement metric

Facebook and Twitter focus on user engagement 

To offset the slowdown in MAU growth, these companies are now focusing on user engagement to maintain growth. Better user engagement helps them command higher ad prices from advertisers.

To demonstrate how the user engagement metric works, we’ll compare the ratio of daily active users (or DAU) to monthly active users for both Facebook and Twitter. Facebook’s DAU-to-MAU ratio was 64% as of 3Q14, according to its filings. But, depending on the region, only 40% to 50% of Twitter’s users logged in to Twitter on a daily basis, according to management’s figures cited during the 3Q14 earnings call. So, Facebook scores better than Twitter on user engagement.

You could consider the Technology Select Sector SPDR ETF (XLK) and the PowerShares QQQ Trust, Series 1 (QQQ) to get portfolio exposure to Facebook.

Latest articles

Broadcom (AVGO) stock fell ~8.5% after markets closed yesterday following the semiconductor giant's fiscal 2019 second-quarter earnings release. It missed analysts' revenue estimate and cut its fiscal 2019 revenue guidance by $2 billion to $22.5 billion due to sluggishness in its semiconductor solutions business.

The SPDR Gold Shares ETF (GLD), which tracks physical gold prices, has underperformed the broader markets year-to-date, rising just 4.4% compared to the S&P 500’s (SPY) gain of 15.9% as of June 14. The sentiment for gold, however, has been turning around.

Safe havens such as Treasuries and gold were back in favor on June 14 as stocks fell due to rising tensions in the Middle East, concerns over growth, and the looming threat of the US-China trade war. The tech-heavy Nasdaq Composite Index fell 0.67% in the first hour of trading.

Lululemon (LULU) stock rose 2.1% on June 13 in reaction to better-than-expected first-quarter results and an upgraded outlook for fiscal 2019 overall. The company's first-quarter adjusted EPS grew 34.5% to $0.74 on revenue growth of 20.4% to $782.32 million. Analysts had expected EPS of $0.70 and revenue of $755.31 million. Here's why the outlook got an upgrade.

14 Jun

IEA Again Slashes Its Oil Demand Growth Estimate

WRITTEN BY Rabindra Samanta

As of 4:40 AM Eastern Time today, US crude oil active futures were at $51.83, ~4% below their closing level in the previous week. If US crude oil prices stay at those levels today, they'll mark their third week of decline in five weeks.

Amazon is discontinuing its Amazon Restaurants service, which has been delivering food for restaurants in parts of the United States. Amazon Restaurants launched in the United States in 2015 and entered the British market the following year. However, it met strong opposition in the British market.