Facebook Inc (FB): One-Year Later, Signs Of Progress

Wide Open Mobile

Yahoo! recently inked a billion dollar deal with photo focused social site Tumblr. While increasing its “audience” by more than 50% was a clear motivation for the deal, Tumblr’s mobile presence is more likely to be the big winner for Yahoo! once the purchase is consummated.

That’s true because no matter how large Yahoo’s online audience gets, Google Inc (NASDAQ:GOOG) still owns the Internet search and advertising businesses. Facebook Inc (NASDAQ:FB)’s search tool faces similarly difficult prospects. However, Google is facing more competition on the mobile front. So much so, that the company warned of margin compression in its most recent annual report.

With margins already tightening and a stock priced for perfection, Google Inc (NASDAQ:GOOG) investors should consider taking some money off the table. Yahoo’s efforts to get into the mobile space may give a nice boost to its turnaround efforts and could make it a buy for those seeking a turnaround story.

Facebook investors should take the Tumblr move as a positive because it speaks to the opportunity that Yahoo! sees in the mobile world. Note that Facebook owns the picture focused service Instagram. Facebook has just as much turnaround potential as Yahoo! if it can keep its mobile growth going.

Ugly Duckling

Facebook Inc (NASDAQ:FB)’s IPO has left it looking like an ugly duckling. But it is making strides in its efforts to monetize its sizable and still growing customer base. While its business isn’t as enticing as LinkedIn Corp (NYSE:LNKD)’s, it has just as much a chance to gain a foothold in the mobile advertising world as Yahoo! or Google. That could turn this duckling into a swan for more aggressive investors.

Reuben Brewer has no position in any stocks mentioned. The Motley Fool recommends Facebook Inc (NASDAQ:FB), Google Inc (NASDAQ:GOOG), and LinkedIn Corp (NYSE:LNKD). The Motley Fool owns shares of Facebook, Google, and LinkedIn.

The article One-Year Later, Signs Of Progress originally appeared on Fool.com.

Reuben is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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