Zillow CEO talks Twitter, Facebook

Spencer Rascoff, CEO of Zillow
Adam Jeffery | CNBC
Spencer Rascoff, CEO of Zillow

Zillow CEO Spencer Rascoff said Wednesday that Facebook's long-term approach to business is a smart move.

Rascoff, who owns Facebook stock, praised the social media company's long-term approach. With the acquisition of WhatsApp and Oculus, Facebook is preparing to take advantage of changing communication and entertainment tools, according to Rascoff.

"Facebook makes long-term bets," Rascoff said on CNBC's "Squawk Alley." "They buy Oculus because they think 10 years from now the way people interact with the Web might be through virtual reality."

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A dual stock structure helps Facebook take longer-term decision, he added, backing Zuckerberg in a challenge over the issue by some shareholders.

"It's true when you're publicly traded having a dual-class stock allows you to be more long-term oriented," Rascoff said.

Read More Facebook probably went public to make insiders rich: Shareholder

Don't be 'a slave to Wall Street'

Talking about Facebook and its focus on the future, Rascoff said he hopes Fitbit would follow the same path and not become "a slave to Wall Street."

The wearable device maker recently increased its IPO price range to $17 to $19 per share from $14 to $16.

"This comes back to the Facebook conversation, and the surest way to make sure they're out of business in three or five years from now is to react to the quarter and become a slave to near-term focus," he said.

Despite competition with Facebook, Rascoff said Twitter has done well.

"By any objective measure, Twitter is an unbelievably successful and impactful company," said Rascoff.

What about Twitter?

How many companies can a TWTR CEO handle?
How many companies can a TWTR CEO handle?   

Under Dick Costolo, Twitter was able to increase the number of users as well as grow its revenue, said Rascoff. Yet, he said, Twitter still had to figure out its business model, something that's usually done before going public,

"It certainly hasn't figured everything out yet," he said. "Typically most companies become public once they've figured out the business model in its entirety and Twitter is still finding it."

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Rascoff added that having Jack Dorsey as an interim CEO wouldn't be suitable in the long run since Dorsey is also the CEO of Square.

"I don't think that anyone can be CEO of Twitter and CEO of another company at the same time. Just 'cause Steve Jobs did it once upon a time doesn't mean it can happen again," said Rascoff.

"What Twitter needs is someone with full-time focus," said Rascoff.