Google Inc (GOOG) YouTube: One Billion Users Per Month?

Amazon.com, Inc. (NASDAQ:AMZN) is another company that may not show the best metrics. Amazon will help put YouTube in perspective. As huge as Amazon has become in the retail market, they “only” have 182 million active users. 4% of those users have Amazon Prime memberships, but they account for 10% of the company’s purchases. These Prime members spend an average of nearly twice what non-members spend. Each of these 7.3 million members made Amazon an average of $78 after shipping and licensing costs in 2012. So, YouTube shows 5.5 users to every one of Amazon’s.

I recently saw a unique valuation approach for Amazon. By using cash from operations as the primary figure to placing value on this company, the company is not over-priced at all. In fact, it was slightly under-priced. Amazon is growing so quickly that a lot of their money is poured into capital expenditures.

With this in mind, let’s look at how the company has performed. The company started nineteen years ago and currently holds a market cap of 115.2 billion. Revenues have increased 1,160% in the past decade and over 27% just last year. It shows gross margins of 24.8%, and its stock is up 5.34% YTD. Its total returns have at least doubled that of the S&P 500 over the past 1, 3, 5, and 10 year periods. The chart below shows how these stocks have done over the past year.

GOOG data by YCharts

The Foolish Conclusion…

YouTube and Facebook have nearly a 6-to-1 ratio of users/customers when compared to Amazon. We’ve seen the crazy numbers and put them into perspective. I still have questions about Facebook and would stay away from it personally. Google and Amazon both appear to be solid companies with great leaders. I would be far more comfortable investing in one of them (or both) than Facebook at this time.

The article One Billion Users Per Month? originally appeared on Fool.com and is written by Tyler Wofford.

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