Facebook’s Instagram video feature seen as challenge to Twitter

https://i1.wp.com/static.guim.co.uk/sys-images/Guardian/Pix/pictures/2012/4/9/1334001376489/instagram-facebook.jpgFacebook Inc.’s FB +0.41% anticipated rollout of a new video service for Instagram is already getting some upbeat reviews from Wall Street and beyond, with one tech executive calling it a potential threat to Twitter.

Facebook is expected to introduce a feature similar to Twitter Vine service during a media event at the company’s Menlo Park, Calif. headquarters on Thursday.

That prompted S&P analyst Scott Kessler to reiterate a buy rating on the stock, saying in a note, “We see online and mobile video as a significant growth opportunity for FB, and have noted recent strong growth for Twitter’s Vine mobile video app.”

Kessler cited a research report earlier this month which found that for the first time there have been “more Vine shares than Instagram shares via Twitter.”

In fact, Wedbush analyst Michael Pachter said the expected video service from Facebook “will make Instagram stickier much as Vine has made Twitter stickier. “

“I think it will be a cool feature,” he told MarketWatch. “The Instagram audience is important to Facebook, given the much younger and more female dominated membership, and I think it is important for Facebook to pay attention to this audience and give them something different.”

And that’s because, “with 90 million users,” he added, it’s likely that “video sharing will take off, and will help Facebook’s efforts to monetize Instagram via interstitial advertising.”

That view was echoed by Marc Poirier, co-founder Acquisio, which helps companies manage online marketing campaigns, who also saw the speculated Instagram video feature as a potential challenge to Twitter.

“Here is a real opportunity to monetize Instagram, which becomes an attractive ad medium for brands seeking to engage with audiences,” he said.

“Inserting video ads into the feed would not only draw in more money from brand advertisers, but it would also create a serious challenge to Twitter’s service, Vine,” he added. “Not only is there still no advertising on Vine, but Twitter has yet to truly emerge with an ad platform that marketers take seriously, hence they’re struggling to draw in any real budgets.”




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