According to findings from the analytics firm Twopcharts that were reported in The Wall Street Journal Monday, there are 974 million existing Twitter accounts, a number that seems at first to rival Facebook's (FB) popularity. However, most of these users are inactive.
Twitter is different from Facebook and many users value the service for information, not communication. But its a problem for the company if only a minority logs onto the service as often as once a month. Compare that to Twitter's major rival, Facebook, which claims 1.23 billion monthly active users as of the end of last year. For Facebook, active can mean many things, including clicking "like" on something hosted elsewhere. Even so, it's a significant difference.
Questions about whether Twitter is truly a broad medium or a niche service are key to the stock's valuation. Twitter climbed from its November IPO level of $26 to a high of nearly $75 in December. But then the stock started to decline and now has run into investor skittishness about the broader tech sector.