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CCTV Script 24/07/14

— This is the script of CNBC's news report for China's CCTV on July 24, Thursday.

Welcome to the CNBC Business Daily, I'm Qian Chen.

Facebook and Twitter are popular sites used by millions of people. But how do they make money? The "Buy" button could be the answer.

Facebook is testing a "Buy" button as it explores how to tap into the 300 billion dollar plus annual e-commerce market.

CNBC's Julia Boorstin has more.

Facebook is looking to make it easier for consumers to buy without leaving the newsfeed, but it's not just about taking a cut from sales, but perhaps more importantly, this allows Facebook to better serve its growing retail advertisers,including the likes of Amazon and Ebay.

[Mark Mahaney / RBC Capital Markets] "We think you'll see more retailers use Facebook as a marketing channel in the future. I think that's what it would look like. We'd see more retail oriented, action oriented ads on Facebook. We're already starting to see them to some extent now."

Mahaney says in the fight for retailers' ad dollars, Twitter is not as well positioned as Facebook with the smaller user base and less demographic info for targeting. But Twitter is also exploring potential "buy now" options for retailers , which might look a little bit like this, a little "buy now" button in an ad. And Twitter's recent acquisition of payments company, CardSpring, sets up the potential for "buy later" button, allowing consumers to save deals to their credit cards to redeem later in stores.

Investors generally look to cash flows and stability of business models for social media IPOs.

Larry Haverty says the "buy now" button might turn out to be quite helpful.

[LARRY HAVERTY - Portfolio Manager, Gabelli Funds] "This is a very powerful concept. You get the revenue growth, plus they convert it to cash flow. Almost 60% of incremental revenue went down to operating cash flow in the quarter. Which indicates an internet service business that's absolutely working at top efficiency. They keep cautioning that they're going to spend money. This is a high class problem. Because the next two things that are going to get into the stable, which is Whatsapp and Instagram, have very very high engagement. So they're going to collect an aweful lot of dollars and I think the stock's fairly reasonable in relation to the growth."

That wraps up this edition of the Business Daily.

I'm Qian Chen, reporting from CNBC's Asian headquarters.

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