Transcript for Twitter Proposes 'CardSpring' Payment Method
I'm -- company York and as a financial markets close in Austria for Friday July 18 -- the story stock and one stock with a story today. Twitter social media network announcing a new acquisition. It's a payment startup called -- spring. And trying to show investors at the -- platform is gonna make it easier for merchants to promote and sell items through links on Twitter so. Here to explain how is supposed to work. Let's bring in my sent it on finance on this Friday afternoon so it might what does cards bring -- you. While they make technology that essentially allows users to redeem coupons are kind of stated Perry Justin and in a particular deal on a kind of a Groupon like -- perhaps so they essentially allow for. Merchants to allow -- to allow for a transaction to be made directly. By users and this would in this case for Twitter would be through a tweet. And and so. Why -- -- Twitter want this as opposed to say like PayPal something else some other kind of opt in online pain but. -- this isn't really -- back and kind of payment processing -- it's much more about it application -- faces the user that in advertising through promoted tweets for example. You could have some button that says you know cash in this this offer right now. And so it's not as much about you know getting the payment settled. As it is about placing a actionable potential transaction write in somebody stream and that's something a Twitter want to do this sort of add to the immediacy which obviously makes it more valuable to advertisers. Are -- -- let's step back from an -- to bigger picture on a pull up the year to date chart for Twitter and finally to how stocks and doing. It's better not so great -- recently right the past couple of months and -- is something like this think it -- p.'s investors. No not if not itself it will not appease investors what I do you think is interesting about it is it's part of a series of moves -- -- is making to -- to. Convey the idea that management is very serious about modernizing their user base they've already kind of tried to say hey we're just gonna grow users and hasn't worked because the use -- race is not grown fast enough. To satisfy Wall Street there's news today or this week that in fact they're going to come out next week when they report earnings with the new metrics that. That intend to show. That their breath they reach many many more people through -- tweets and things like that. -- simply shown in their actual core user base so this deal alone will not be enough I think to satisfy Wall Street which has been disappointed. With the growth story with how much advertising revenue they've been able to collect. But it does show that there there on the path to saying look we understand that our platform needs to. Be turning to business somehow not just be something that people get a kick out of. Following I know what other social media that blustery let's keep an eye on FaceBook that's been picking up it's getting into the commerce game as well and it -- There's gonna be what -- abide by the next in the light button. What is this about something like that now they're just trying this is a trial for some advertisers some merchants. Where you will be allowed to essentially directly by as part of an ad that side that's in your feed. At this is something they've sort of and a half way kind of -- tried in the past hasn't really taken off. But again FaceBook also wants to have that immediacy that direct transactional. Potential relationship -- its users. And I do think it's also part of a general project on Facebook's part to trying quantify the value of the FaceBook. User base to advertisers so they've already done some research -- that says you know we can try to see how much in store sales or online sales for -- merchant. Had been increased after -- advertisement based organist we have much more direct way obviously capturing business through the FaceBook user base which is now one point two billion people. We're which also customize is based on the at the FaceBook user's interaction corrects. Exactly so that's the real value or at least the potential value of having that -- -- -- and history of your personal relationships you're buying patterns what you look at what you don't. I'm theoretically you could -- an -- and then even teller and offer within an ad. To what you might actually like. -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- Facebook's ever -- -- pretty nicely despite that botched rollout which I know has been getting you know. When that first happen -- -- the first 56 months of that -- all anyone talking about now but FaceBook seems to be holding its own. If FaceBook and a monster 2013. It really did just come back and -- and more from the IPR debacle. And it really has held up well and I think the way that the Wall Street's looking at this no way. The advertising business is looking at it is. It's essentially what the old TV broadcast networks were in terms of you know getting the broadest possible ad -- For your dollar and that's why I do think even though it's a fabulously expensive stock -- -- 180 billion dollar market value or something at this level. And you know the earnings don't really -- today substantiate that kind of valuation people say look it's the single biggest pool of eyeballs available in the world we have to. Take a bet that they're gonna capture more than -- -- Bob advertise. Well given that and then also -- -- acquisition by Twitter and other. You know players like PayPal Google Amazon should they be worried or is there enough of a market for everyone to -- have a little bit of the. You know I think they -- should be worried for their own individual reasons I don't think they're necessarily going head to head across the board with. The social network companies. But I do think like for example PayPal is a little bit under pressure from the visa and Mastercard's of the world who feel like you can kind of you know navigate around PayPal. By even things like big point -- these other. Sparta systems out there. That don't necessarily -- as much of he stream for PayPal when it comes to Google I think what they mostly are concerned -- Is whether advertising dollars move away from web search and other areas like social networks which which clearly is happening. Not so much that is -- Goebel who had great earnings -- in stock was up nicely. But I do think everyone is eyeing these social platforms. For what they mean in terms of dominating the future. Median advertised. More than just an invitation to play candy crutch right mind would instantly make some -- have been -- are out my -- -- forgot who -- like every weekend. You know what's in store stocked with ABC New. York.
This transcript has been automatically generated and may not be 100% accurate.