New kids on the media block still need to add the old school ruthlessness of their predecessors

The new media moguls, like the Twitter chief executive Dick Costolo and Facebook’s founder Mark Zuckerberg, have taken the stage in the past week or so on Wall Street following the big takeover moves by traditional media titans Rupert Murdoch and John Malone earlier in July.

While Murdoch’s 21st Century Fox is trying to buy Time Warner and Malone and his Liberty Media group is buying a stake in ITV to expand the European front of his global empire, Costolo and Zuckerberg brought their quarterly earnings to Wall Street using a different language about their companies that many investors love and others remain sceptical about.

Even allowing for the funky, fuzzy and forgiving west coast accounting methods of Silicon Valley, Wall Street’s analysts got excited by Twitter’s quarterly results, when the company proved to its true believers that it may actually have the staying power required as a public company to make money for shareholders.

Cue the inevitable “Twitter versus Facebook” comparisons – a corporate battle for the new age – with financial TV talking heads agog and beside themselves at this “new media paradigm” of the younger moguls taking on the grumpy old geezers like Murdoch and Malone.

To be fair, this time around, at least the financial TV pundits and e-commerce evangelists had some real numbers to hang their jackets on.

Twitter’s second-quarter revenue more than doubled to $312m (£185m) – real money – helped by the frenzied number of tweets sent during the World Cup.

Twitter’s shares rose more than 30 per cent in after-hours trading on Tuesday after it announced its results. No mean feat.

Twitter’s average monthly active users rose 24 per cent to 271 million, and its advertising revenue soared 129 per cent to $277m. Investors pounced on such concrete numbers.

Those Twitter numbers, though, were dwarfed by Facebook’s results reported a few days earlier – about 1.3 billion monthly active users, and advertising revenue of $2.68bn.

Yet, according to Reuters data, Twitter shares were trading last week at about 200 times forward earnings, compared to Facebook’s 39 times.

Facebook’s stock market value – already an incredible $190bn – would be almost $1trn if its shares were trading at Twitter’s valuation.

So why the lofty valuations for Twitter? Is it all hype in a year where stock valuations have gotten a trifle out of control?

Some Wall Street analysts believe Twitter still has huge, untapped potential as a distributor of mainstream information – valuable information for investors – as opposed to the “goofing off” information that pervades most social media.

Which makes you wonder why the grown up news wire distributors like Reuters, Bloomberg, Dow Jones, Press Association and the Associated Press never saw the potentials in a Twitter-like service.

Facebook floated at $38 two years ago and fell as low as $18 in a wretched first year as a public company before starting a slow but steady climb to today’s price of around $72.

Twitter went public at $26 last November and initially soared as high as roughly $70 two months later before falling as low as just over $30 in May. Then it started to climb again, reaching $45 this week.

As public companies, Twitter and Facebook have similar, brief, histories. They both have compelling promise, if they can behave like grown-up companies.

Twitter’s generous stock-based compensation plans for its staff alarms some investors. Facebook also upsets many with its corporate behaviour.

Going forward, it will be fascinating to see if the likes of Costolo and Zuckerberg have the gumption, stamina, gut instincts, cojones, decisiveness and ruthlessness of old school media men like Murdoch and Malone.

Who knows? Maybe they have all of the above and a lot more. They have certainly come from nowhere to stake a credible claim in the modern media landscape.

It’s not hard to see why the big players covet Snapchat

Hard on the heels of Facebook and Twitter are companies like Snapchat, the mobile app where users share images and messages that disappear in a few seconds.

That’s right – the messages self destruct just like in Mission Impossible. Genius.

In this age of extreme digital narcissism, where too much “sharing” gets too many people into too much trouble, Snapchat is an extremely valuable idea.

That’s why Facebook and others would like to muscle in on Snapchat’s technology and its popularity with young people. A $3bn takeover approach from Facebook has been rejected but speculation is rife that an investment from investors, which include Chinese e-commerce giant Alibaba, that values it at around $10bn is being negotiated.

Alibaba is planning a monster initial public offering (IPO) in New York in the autumn and looking for investment opportunities.

Snapchat offers such an opportunity. More than 700 million disappearing “snaps” a day are sent on Snapchat, according to Bloomberg. The firm’s core user demographic is said to be the age group of 13 to 25, with young women making up 70 per cent of the users. That’s gold dust.

While it is a young company with much to prove, it is not hard to see why Snapchat is being coveted by the players who understand this space in the market better than most.

The sauciest prospect thrown up in the current media consolidation landscape is the speculation that American cable company AMC – the home of Breaking Bad and Mad Men – may buy a stake of almost 50 per cent in BBC America.

AMC has not confirmed any talks but amid the frenzied deal making going on in the space, such an arrangement could make perfect sense.

The BBC said: “BBC America has just recorded eight straight years of growth and has never been stronger in brand, ratings, advertising or critical acclaim. We do not comment on market rumours and speculation.”

It is understood that, if any deal happened, BBC America would remain controlled by BBC Worldwide, the commercial arm of the BBC.

BBC America and AMC units have already collaborated on shows including the dramas Top of the Lake and The Honorable Woman.

BBC America already reaches more than 80 million US homes. A deal with AMC could bring Auntie’s influence to many more. As Martha Stewart would say: that’s a good thing.