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Google Inc (GOOG) Is Scared of Facebook Inc (FB): Here’s Why

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Google Inc (NASDAQ:GOOG)When you think search engines, Google Inc (NASDAQ:GOOG) is the one name that comes to mind. Google is far and away the leader in internet search technology. It’s on your phone, tablet, computer, and soon it will be on your face (in the form of glasses). People go to Google to find a link to obvious sites such as YouTube (which, by the way, is also Google). Google Inc (NASDAQ:GOOG) is the king of the web, but like all kings, Google is weary of would be usurpers. This is where Facebook Inc (NASDAQ:FB) comes into the picture. Facebook is the most popular social networking site on the internet today. It has successfully managed to convert the social experience of daily life to a blue and white web page that you like (both figuratively and literally).

At first glance, Facebook Inc (NASDAQ:FB) and Google Inc (NASDAQ:GOOG) seem to be relatively distant competitors. Google’s primary function is as a search engine that allows you to find important things such as videos of kittens, and Facebook is a social media site that allows you to see pictures of your friends, family, and former classmates. While these differences are valid, both Google and Facebook make most of their revenue through advertising. Every time you search something on Google or “like” a page on Facebook Inc (NASDAQ:FB), you give the company information. They in turn use this information to select advertisements to show to you in the hopes that you will click on it and buy something on the resulting page. You can only click an advertisement on one page at a time, so the longer you are on Google Inc (NASDAQ:GOOG) or Facebook, the more opportunities they have for you to click on an ad and send money to their tech savvy pockets. Because of this, the thing that these companies are competing for is your time. The longer you stay on Facebook “poking” people, the happier Facebook is.

When you compare the financial performance between Google and Facebook Inc (NASDAQ:FB) it is hard to see how Facebook could pose a threat to the tech-giant that is Google Inc (NASDAQ:GOOG). With net income of over $11 billion, revenue growth of 33% and a current stock price of almost $800, Google has more capital and ability to expand. They have had more success in the public market than Facebook and show no signs of slowing down. They are Goliath. But much like David had his slingshot, Facebook has a weapon of its own. This weapon is you and everyone you know.

Look up at your open tabs (go ahead, I’ll wait). If you’re like me, Facebook Inc (NASDAQ:FB) is open and you keep eying it to make sure it reads “Facebook” instead of “(1) Facebook.” People, especially the younger ones, are glued to instant updates that involve their friends, groups, and interests. This is the advantage that Facebook has that makes Google afraid. While Google also has Google+ (its social networking site boasting 343 million users), Facebook still dominates social networking with 51% of global internet users (693 million users from 903 million accounts) and an academy award winning movie. While Google Inc (NASDAQ:GOOG) allows you to search the internet, it can often be broad. Facebook Inc (NASDAQ:FB) allows you to instantly see what product or entertainment your friends like. This cuts down on searching time and gives Facebook the information it needs to send you pointed and effective advertisements.

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