Twitter surges after Facebook says it will curtail news in users' feeds

Investors bid Twitter shares higher Friday after Facebook said it would limit the number of news items it shows to its users.

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Twitter surged as much as 5 percent on heavier-than-usual volume as some bet that the move by its larger rival could open an opportunity for Twitter to sell more advertising.

“This is the best news we’ve heard for Twitter in a long time,” Ross Gerber of Gerber Kawasaki told CNBC’s “Fast Money Halftime Report” Friday.

Twitter has struggled to grow as it’s been squeezed by Facebook and Google, the top two sellers of online ads.

Wall Street analysts polled by Thomson Reuters expect that Twitter sales fell 5.3 percent last year to $2.4 billion, based on the average estimate of those who cover the stock. But analysts think its sales will rise 6.4 percent in 2018 to $2.55 billion.

Meanwhile, Facebook sales are seen surging 33 percent to $53.6 billion in 2018, while Google parent Alphabet is expected to post revenue of $131 billion, or year-over-year growth of 19 percent.

Facebook shares fell as much as 4 percent on heavier-than-usual volume after it said it would show fewer news items and videos in its News Feed, in favor of more content from users’ friends.

CNBC’s Sara Salinas contributed to this report.

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Source: CNBC – Tech

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