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LinkedIn Corp (LNKD), Google Inc (GOOG): Where Does Facebook Inc (FB) Go from Here?

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Facebook Inc (NASDAQ:FB)’s initial public offering in May 2012 valued the company at $104 billion, the largest valuation to date for a newly-public company. The company’s stock debut at $38 per share was a disappointment as investors saw their investments dwindle to $17.73 per share by Sep. 4, 2012.

Facebook Inc (NASDAQ:FB)

Since its IPO, Facebook Inc (NASDAQ:FB) shares have undergone significant analyst scrutiny. They have been buffeted by ambiguous earnings, and until recently were held down by a poorly-monetized mobile business. Following its latest earnings release on July 25, shares of Facebook Inc (NASDAQ:FB) rocketed to $34.36. This rally puts the company just 5 points shy of its issue price. To push its stock prices to new highs, Facebook Inc (NASDAQ:FB) must continue to monetize its mobile user base as it has finally begun to do.

Facebook Inc (NASDAQ:FB) surprises Wall Street

The company’s second quarter report came in well above consensus estimates. Analysts had Facebook Inc (NASDAQ:FB) earning $0.14 per share on $1.6 billion in revenues. The earnings release, and the following earnings call, reiterated how wrong the analysts were. Facebook brought home over $0.19 per share and $1.81 billion in revenues on a 1% increase in operating margins.

Where Facebook hit a home run was with its mobile subscriber base. The ads placed through their mobile platform now generate over 40% of the company’s current ad sales, which is a 11% uptick year-over-year. This monetization is substantial, especially when considering that Facebook’s rival Google Inc (NASDAQ:GOOG) continues to have problems translating mobile ads into increased revenue.

Where Facebook’s competition stands

Google Inc (NASDAQ:GOOG)’s latest earnings release last week was disappointing to Wall Street. Its earnings-per-share was $1.22 below the consensus estimate. Google Inc (NASDAQ:GOOG) noted in its conference call how it has been struggling to squeeze ad revenue from its mobile customers. This is a surprise for investors as the company’s stock inched its way to all-time highs. That being said, I wouldn’t count Google out just yet as the global conglomerate seems to make a way where most businesses would fold under the pressure. I would not recommend buying Google shares at this price, however; it would be better to hold out for a pullback.

LinkedIn Corp (NYSE:LNKD) being the more mature of the social networking group, has over 225 million members. This translated into second quarter revenues of $324.7 million, a 72% increase from the same period last year. The number of registered members is also a 36% year-over-year increase. The key number is the company’s online sales of $140 million, which is 43% of net revenue.
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