Don’t Count Google Inc (GOOG)+ out Despite Analyst Love for Facebook Inc (FB)

Page 1 of 2

Warning: parse_url(http:///fbn/content/blogpost/add/%22http:/www.fool.com/investing/general/2013/01/30/will-google-plus-catch-facebook.aspx?source=iptimolnk0000001) [function.parse-url]: Unable to parse URL in /var/monkey/provers1/blog/wp-content/plugins/sem-external-links/sem-external-links.php on line 165

If you are looking to invest in tech, I recommend being willing to accept the fact that the market is more likely to go the opposite way you believe it should go. Few industries are as susceptible to emotion as is technology. Below, I provide a long-term vision on Google Inc (NASDAQ:GOOG) and Facebook Inc (NASDAQ:FB) despite how volatile the short-term can be.

Google Inc (NASDAQ:GOOG)Google

It’s no secret that Google has performed well for several years, and I would attribute this to proper timing in product launches and the ability to successfully convert traffic into revenue. Not long ago Google Inc (NASDAQ:GOOG) ventured into social networking when it introduced Google+, its social networking site. Since its launch, the site has seen the number of users increase rapidly, and it now ranks second in social networking activity behind Facebook. While many have likened Google+ to “a virtual ghost town,” a point even I can attest to in light of the company constantly trying to connect me with new friends, I believe this will change when Facebook is seen as a fad. The amount of active users has declined in the United States and United Kingdom–two key geographies–over the last twelve months by around 2%. In my view, this is a good indication that the Facebook fad is indeed dying. By the close of last year, Google+ had 343 million active users.

Further, Google Inc (NASDAQ:GOOG) is considered to better at converting traffic into revenue compared to Facebook. Due to the growing popularity of Google+, advertisers ranked the site in the top five marketing sites category behind Twitter and Facebook.

Readers may be surprised that I am focusing this article on Google+ when there is simply so much to talk about with Google. The reason why I am emphasizing it is because I believe it reveals something behind behavioral economics. Not too long ago, the Apple Inc. (NASDAQ:AAPL) bulls were adamant that no one would replace iOS as the go-to mobile operating system. And few would expect that Google would take its place. Well, Google Inc (NASDAQ:GOOG) now has a commanding lead in the mobile operating space through Android–it just needs to work on monetizing it. With plans to release the X Phone, the company is looking like it is just about to do that. If it can integrate Google+ successfully into the X Phone, it is very likely to get customers to shift away from social networking. Mobile users can be very fickle in the sense that they use apps based on newly-accepted concepts of “convenience.” Just like how texting used to be popular, the introduction of new apps changed that. And Google Inc (NASDAQ:GOOG) can change it yet again, especially if it has joint control through a mobile operating system, a phone, and a strong package that includes Gmail, YouTube, and, yes, Google+.

Facebook

According to the fourth quarter earnings report by fFcebook, the average number of everyday mobile users grew by 25%. Despite this encouraging growth, Facebook reported that quarterly profits declined by the double-digits–a point I’m surprised more analysts aren’t pointing out. They attributed this decline to tax expenses and compensation, but this is just obfuscation for a fact that I made earlier: The underlying business is eroding from competition. Competitive pressures perhaps can be best seen in how Facebook’s margins reduced by a whopping 15 percentage points–from 48% in the previous year to 33%.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 Top Reasons For Getting Fired

The 3 Best States to Start an LLC

10 Jobs That Allow You to Travel

7 High-Paying Jobs You Can Do From Home

12 Best Cities to Shop in USA

10 Best States To Practice Medicine

The 10 Best States to Have a Business

The 12 Most Expensive Apple (AAPL) Apps in the Market

The 10 Richest Billionaires in the World

10 Biggest Kickstarter Failures

The 10 Best Places to Work At

The Top 10 of Google Inc (GOOGL)’s Most Expensive Acquisitions

13 Best Cities to Visit in South America

10 Most Expensive Works of Art of All Time

The 10 Richest Banks in the World

The 10 Best-Paying Jobs in America (2014)

7 Most Expensive Foods in the World

The World’s Top 10 Earning Authors

Five Wicked and Very Expensive Items (and Other “Stuff”) Sold on eBay

10 Biggest Celebrity Bankruptcies

The Top 10 Highest Paid CEOs in 2014

The 10 Most Expensive Real Estate Cities in America

10 Most Expensive States To Live In America

The 10 Best Airlines in the World

The 10 Best-Selling Cars in 2014

The 10 Best Industries to Invest In

The 10 Most Expensive States to Own a Car In

Top 10 Business Schools in US: 2014 Rankings

Top 20 Female Billionaires in 2014

6 Movies That You Should Watch to Better Understand The Cold War

Top 15 Best Paying Jobs for Women in 2014

Top 6 Things Rich People Do Differently Every Day

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!