Google (GOOG)’s Advertising to Steal Facebook (FB)’s Spotlight

Facebook Inc.Following news that Twitter will begin ramping up advertising effortsFacebook Inc (NASDAQ:FB) now has another website fighting to surpass the largest social network in display advertisements. Google Inc (NASDAQ:GOOG) is poised to rake in about 15.4 percent of display ad profits in 2012 alone, beating Facebook by just one percent.

According to The New York Times, ads that incorporate images or video have become quite popular in the last year alone with the market growing 21.5 percent throughout 2012. While eMarketer had previously determined that Facebook Inc (NASDAQ:FB) would remain in the lead with its many display ads, this is no longer likely to be the case as the research firm lowered its forecast on Mark Zuckerberg’s unstable company this week.

As Piper Jaffray noted Thursday morning, Facebook’s main product is simple display ads shown on the side of its platform. With Google closing in on a very important part of the company’s profit, Facebook is beginning to come up with other innovative ways to attract businesses and consumers through advertising and the utilization of its infamous newsfeed.

“[Facebook] has recently introduced an ad exchange and Sponsored Stories, both of which appear to be performing well,” Piper Jaffray stated. “We believe there are two additional opportunities for Facebook that appear to be relatively simple ways for them to further monetize existing page traffic and extend the graph: monetization of search and a more traditional ad network.”

Facebook’s advertising business will continue to rapidly evolve, and the declining stock can be thankful for that. On Wednesday, the social network saw its shares leap up almost 6.5 percent on news that Facebook Inc (NASDAQ:FB) is testing a service to place ads on other mobile applications beyond its own. Closing at $23.29 yesterday, shares were trading at their highest price in seven weeks.

As Facebook revels in its recent good fortune, the company still must sleep with one eye open.

Google has been pouring resources into its display ad business and courting Madison Avenue,” The New York Times reported. “Display ad spending growth will outpace search ad spending growth for the first time this year [according to eMarketer].”

Additionally, analysts at Morgan Stanley believe that Google Chrome and Android guard the core advertising businesses – a job that the company does not take lightly.

Although the advertising race will certainly be a close one to call, both Google and Facebook are set to champion the market with a combined estimated percentage of 29.8 percent. As other large companies like Yahoo! Inc. (NASDAQ:YHOO) and Microsoft Corporation (NASDAQ:MSFT) trail behind with 9.3 percent and 4.5 percent respectively, the display ad accomplishments of Google and Facebook are something to be admired.

Facebook Inc (NASDAQ:FB) is down about 1.25 percent in Thursday’s pre-market session at $23. Google Inc (NASDAQ:GOOG) sits around $724 on Thursday morning, down about .48 percent in pre-market trading.

This article was written by Katey Stapleton, and was originally posted on Benzinga.

Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 10 Most Expensive iPhone Apps

The 9 Most Expensive Designer Shoes in the World

The 10 Most Expensive Cigarette Brands

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

The 10 Most Peaceful Countries in the World

5 Big Reasons Communism Failed

The 15 Most Famous Carl Icahn Quotes

10 Scary Animals that are Actually Harmless

The 8 Most Famous Singer-Actors in Entertainment

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!