Facebook (FB) and Google (GOOG) are two of the largest household names online today. If you want to know something…”Google (GOOG) It!” Want to get in touch with an old friend? Find them on Facebook (FB)! These are terms that the average American uses every day. While Google (GOOG) is a much larger company that’s definitely a beast in its own respect, Facebook (FB) isn’t far behind; and I think that they’re going to start causing some big problems for Google (GOOG). Today, we’ll talk about Google’s dominance of the online ad space, Facebook’s growth in the industry, the feud that’s been brewing between the companies for a while now, and my overall opinion as to which company is the better investment.
Google (GOOG) Currently Dominates Online Ads
Google (GOOG) is a very dominant company. When it comes to the online ad space, the company takes around 30% of the cake. While Google Search accounts for a large portion of that, it’s important to remember that search isn’t the only reason that the company takes such a large piece of the pie. The bottom line is that….
Google (GOOG) Is Everywhere!
- Search – Everyone knows about Google (GOOG) Search. Even in my early adult years, one of my favorite terms was “Google it…” The company is the dominant party in search and that doesn’t seem to be changing any time soon. According to NetMarketShare.com, Google (GOOG) takes more than 60% of the worlds online search market share!
- Social – OK, so Google’s not necessarily a social media giant, but we can’t forget about Google+. While it’s nowhere near the size of Facebook (FB), Twitter (TWTR), or LinkedIn (LNKD), it is generating at least some interest.
- Video – Have you heard of YouTube? If not, you probably live under a rock! The online video streaming service is the largest of its kind and has become a household name in and of itself. Guess what….Google (GOOG) owns it! Cha Ching!
- Ad Aggregation – Look at the ad on the top of this article, the right, and the bottom. Seems pretty familiar right? That’s because CNAFinance.com is not the only website that uses this ad format. The ads are part of a program called Google (GOOG) Adsense and they give website owners a way to monetize content; they’re also great at lining Google’s hypothetical pockets.
- More – Google (GOOG) has tons of other products that bring in ad revenue; but that’s for another article in itself.
While Google (GOOG) is a massive company, we can’t discount the sheer size, strength, and more importantly eagerness to grow that we see from Facebook (FB). The company’s IPO price was $38. In a short period of time the value of Facebook (FB) has skyrocketed to $79.31, and it’s expected to continue in the upward direction. Here are a few things you should know about Facebook (FB).
- Active Users – The user base on Facebook (FB) is amazingly big. In the last quarter, the social network had more than 1.23 billion monthly active users and more than 747 million daily active users; and they’ve got the ad revenue to prove it!
- Diving Into Streaming Video – Facebook (FB) has offered a streaming video platform for quite some time now. However, that platform hasn’t really gotten enough attention; so, there really hasn’t been much growth. That is, until recently. The social network has been making big moves in the streaming video space, stepping on the YouTube’s toes at any available chance. The thing is this…Facebook’s big plays in streaming video are working!
- Active Advertisers – Since we’re talking about ad revenue, we might as well just jump into the gist of things…active advertisers. Facebook (FB) just announced that they have more than 2 million active advertisers. So, considering that, if each advertiser spent only $1 per day (they spend far more), that would equate to nearly $800 million in annual revenue.
Facebook (FB) & Google (GOOG) Just Don’t Get Along
If you watch the news about the two companies, it’s pretty clear that they don’t generally get along. One of the biggest public feuds between Google (GOOG) and Facebook (FB) had to do with Google (GOOG) attempting to use Facebook (FB) data for their search results without allowing Facebook (FB) to use Gmail data. As a matter of fact, to this day, Twitter (TWTR), LinkedIn (LNKD), and other social media tends to show up in Google (GOOG) search far more than Facebook (FB) as a result of the arguments over data use.
What Stock Is A Better Investment?
In this case, while Facebook (FB)’s user base is smaller, I think they may have the upper hand. The reality is that everyone uses Facebook (FB); and while there are other options, none are nearly as popular. The social atmosphere makes it hard for users to leave Facebook (FB). On the other hand, users can easily use Bing without upsetting their friends if they get tired of Google (GOOG). Therefore, as competition comes into Facebook’s space, they don’t have to worry much about it. However, competition in Google’s space could start cutting into their market share; as Bing already has. So in that respect, I think Facebook (FB) may have the upper hand in the long term end of the battle.
What Do You Think?