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Article posted: 11/16/2013 7:38 AM

Twitter in celebrity spat with Facebook as rivalry deepens

By

SAN FRANCISCO -- Katy Perry, Justin Bieber and Lady Gaga are the most followed celebrities on Twitter, yet the pop stars have even more "likes" on Facebook. Now the world's biggest social network is looking to capitalize.

As Twitter revels in its successful initial public offering, Facebook is pushing onto the microblog's turf, preparing to roll out a tool that makes it easier for the rich and famous to chat with their followers, according to a person with knowledge of the matter, who asked not to be identified because the feature hasn't been released.

Letting actors, athletes and politicians communicate in 140 characters via public question-and-answer sessions has helped Twitter's popularity by removing the barrier between celebrity and fan. The stakes escalate now that Twitter must appease investors while also competing more deeply with Facebook, which is helping its billion-plus users interact with their heroes.

"This is an area of strategic importance to us," said Justin Osofsky, vice president of media partnerships and global operations at Menlo Park-based Facebook. "We've been building our partnerships team in Los Angeles and globally to better work with celebrities and media partners and simultaneously investing in products that better surface the conversation."

Osofsky didn't comment on specific products the company is developing. He said his team has grown to more than 10 people and continues to expand. Rachael Horwitz, a Twitter spokeswoman, declined to comment.

This is fresh territory for the Web upstarts. Two years ago Facebook and San Francisco-based Twitter were venture-backed social-networking companies trying to prove there was big money to be made in online chats. Now they're worth about a combined $140 billion and vying for leadership in the social-media advertising market, which is projected to surge to $11 billion in the U.S. in 2017 from $4.7 billion last year, according to researcher BIA/Kelsey.

The celebrity battle is symptomatic of a bigger clash between the two companies, which are located about 30 miles apart (48 kilometers) in the country's technology hub. Both are vying to connect advertisers with mobile users, bolster international revenue and hire Silicon Valley's most coveted developers. Twitter spelled out the challenge in its IPO prospectus.

"We compete against many companies to attract and engage users, including companies which have greater financial resources and substantially larger user bases," Twitter said.

Twitter jumped more than 70 percent in its stock market debut on Nov. 7, after raising $2.09 billion in the biggest technology IPO since Facebook's last year. The stock fell 7.2 percent to $41.65 the next day. Twitter is still a fraction the size of Facebook, with about one-fifth the market capitalization and number of users and one-twelfth the revenue.

Facebook is using that heft to lure celebrity attention. It's improving products to woo musicians, sports stars and other popular personalities, encouraging them to interact with fans, according to Osofsky.

"They are competing on core functions that each service needs," said Josh Goldman, a general partner at Norwest Venture Partners in Palo Alto. "That is sort of creating a battle between these two companies, even if the use case is different."

Celebrities including Cher, Martha Stewart and Julia Louis-Dreyfus have already held question-and-answer sessions using available features. Stewart, with about 800,000 "likes" on Facebook, took to the site on Oct. 23 to answer questions ranging from what she thought was the best cake option for Halloween to her advice on puppy training. "Persevere and listen to the dog," Stewart wrote.

The offering is another way to attract stars who, like actor Channing Tatum, use Facebook's Instagram service to post pictures of their kids. Or like basketball player Kobe Bryant, who posted a video on Instagram of his injury rehabilitation prior to even joining Twitter's Vine service.

In addition, Facebook showed the first official clip of the movie "The Hunger Games: Catching Fire" earlier this month, and in August premiered the music video "Holy Grail" by Jay-Z featuring Justin Timberlake.

Twitter still gets plenty of celebrity attention. That includes the first photos of Kanye West's and Kim Kardashian's baby earlier this year. Last month, Kelly Clarkson used Twitter to show pictures from her wedding. And Bieber, who has 57.3 million "likes" on Facebook and 46.8 million Twitter followers, is a regular user of both sites to share videos, his whereabouts or whatever crosses his mind.

In its prospectus, the first competitor Twitter mentions is Facebook -- including Instagram -- and says the company has "been introducing features similar to those of Twitter."

The same filing has a section explaining how the site works with a conversation featuring chef Mario Batali and musician Gavin Rossdale. It also showed a tweet from President Obama, who posted after winning re-election in 2012.

"It's still the default to just go to Twitter and gain a following there," said Phil Contrino, chief analyst at researcher BoxOffice.com. "But Facebook in a lot of ways can be just as powerful. Maybe you'll see more celebrities starting to use that as Twitter gets a little crowded."

In early October, Twitter said it will provide links that let pay-TV users record or view programs on Comcast Corp.'s cable service, as it tries to crack the television market. The goal is to have See It buttons on all pages on the Web, similar to Facebook's Like button.

Facebook is pursuing some of the same TV partners, sending weekly reports to networks that include data around user activity on the social network tied to top shows.

Nina Garcia, a judge on the reality show "Project Runway" and creative director for Marie Claire magazine, said she uses Twitter for more immediate gratification and Facebook for deeper communication.

"I use them for different purposes," Garcia said in an interview. "I will post on Twitter and then I will go back and I will do all my favorite pictures on Facebook."

Garcia has over 1 million followers on Twitter, more than five times the size of her audience on Facebook.

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