Facebook: Twitter is “in the rear-view mirror”

Twitter may still be the media darling of the day, getting all kinds of attention amid its huge user growth earlier this year. But Facebook, once considered Twitter’s most fierce competitor because it also wants to let users post bite-sized updates online about their thoughts, apparently no longer thinks of Twitter as a threat.

Facebook’s executives aren’t really thinking much about Twitter these days and see it as a niche site which is unlikely to grow — or at least, so they say.

“Twitter is a great company,” said Chamath Palihapitiya, Facebook’s vice president of growth, mobile and international expansion in an interview yesterday. “What they do is offer a way to publish information in a very consumable, public way.”

But, he continued, “they’re in the rear-view mirror.”

“To focus on a company with 40 million users that is not growing is not a good idea,” he said, citing Hitwise market share data as evidence of Twitter’s slowdown.

Palihapitiya said the last time he thought about the company was when Twitter board member Bijan Sabet looked him up in April and took him to coffee. (It’s amusing that Twitter co-founder Biz Stone used the exact same “rear-view mirror” language to describe the competition when we talked to him last month.)

Palihapitiya made the comments in a portion of the interview where we asked him about which company — Google or Twitter — is the bigger competitor to Facebook. Other Facebook executives, including Chief Operating Officer Sheryl Sandberg, have also suggested that Google is more of a competitor than Twitter.

The statements show Facebook has much larger ambitions. While Facebook has clearly spent a lot of time over the past year trying to upgrade its site to make it easier for users to post micro-blogging messages in a way that is almost identical to Twitter, that job of adapting is done, Palihapitiya said.

“Our task it to make sure we innovate and to make sure there’s no new upstart experience that could take users away,” he said. “Then No. 2 — we need to make sure that as more and more people use the product, we continue to keep it really elegant, simple and fast.”

Now Facebook is setting its sights on becoming a massive company on the order of Google, Microsoft or Yahoo.

“There are three people ahead of us,” Palihapitiya said, referring to those three companies. Of those, he said Google looms largest. That’s because Google now dominates the primary way most people start looking for information — with a search engine, which they use to then browse the web. Facebook, Palihapitiya says, envisions a future where people consume information in a very different way: You start at Facebook, and consume information largely upon recommendation from your friends or via other social filters.

When looked at that way, Facebook has so much more work to do that merely compete with status-update company like Twitter. “We have to be ubiquitous. We’re not building a place where Britney Spears says she is drinking a latte,” said Palihapitiya.

Facebook may have 300 million users, but Yahoo has 600 million and Google has 900 million, he pointed out. Indeed, Palihapitiya said that he and Zuckerberg have tossed around ideas like offering online health services, and a way to transfer financial information back and forth between users, he said.

Twitter went mainstream earlier this year, fueled by media reports about its ease of use, and by popular interest in viewing what famous movie stars and other people said in their Twitter streams. However, there’s still considerable disagreement about how entrenched the service has become for regular people.

Some reports show that many users don’t come back, or don’t actively participate — but merely gawk at what other people tweet. Twitter has a reported value of $1 billion — which is the price tag private investors put on the company when they agreed to invest. And there’s no doubt the company has its own ambition: It hopes to get to a billion users — which would make it much larger than Facebook.

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