Don’t Overestimate Facebook Inc (FB)’s New Video Ads

Page 2 of 2

Google Inc (NASDAQ:GOOG) already enjoys a strong profit margin of 21% and an earnings before interest and taxes margin (EBIT) of 24.3%. With clean balance sheet and a total debt to equity ratio of 0.06, the company is very financially attractive.

Conclusion

From an Advertiser’s perspective, Facebook Inc (NASDAQ:FB)’s display and video ads can be replicated on other major web properties. The company is the world’s leading social network, but it is far from having a control on the global display ad market or video ad market. Google Inc (NASDAQ:GOOG) is in a different position. Outside of China and Russia it maintains very tight control on the search market.

Microsoft Corporation (NASDAQ:MSFT) and Facebook Inc (NASDAQ:FB) are fighting together to break Google Inc (NASDAQ:GOOG)’s control, but it is far from certain if they will ever be able to reach their goal. Until things change, Google’s tight control of the search market and P/E ratio below 30 make it one of the more attractive technology firms.

The article Don’t Overestimate Facebook’s New Video Ads originally appeared on Fool.com and is written by Joshua Bondy.

Joshua Bondy has no position in any stocks mentioned. The Motley Fool recommends Facebook and Google. The Motley Fool owns shares of Facebook, Google, and Microsoft. Joshua is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Page 2 of 2