Facebook Inc (FB), Google Inc (GOOG): Here’s What The Competitive Landscape Looks Like

Page 1 of 2

Facebook Inc (NASDAQ:FB) reported an exceptional quarter. The revenue growth was what truly astounded investors and analysts alike over the past quarter. The reason for growth in revenues was primarily driven by Facebook Inc (NASDAQ:FB)’s strong growth in both mobile and international. Facebook Inc (NASDAQ:FB) maintains its position as a prominent advertiser against the likes of Google Inc (NASDAQ:GOOG) and Microsoft Corporation (NASDAQ:MSFT)’s Bing.

Facebook IncEarnings highlight

While Facebook Inc (NASDAQ:FB)’s earnings per share figures fell below analyst estimates, the company was able to sustain some strong revenue growth. The company’s revenues grew from $1.058 billion from the year ago period to $1.458 billion in the first quarter of 2013. The company’s growth in revenues was driven by the mobile platform.

Mobile users were 751 million on March 31, 2013; basically year-over-year growth of 54%. The growth in mobile users easily dwarfed the daily active user statistics which grew by 26% year-over-year. The growth in the company’s monthly active user statistics was 23% year-over-year. Currently Facebook Inc (NASDAQ:FB) has 1.11 billion monthly active users. Growth was driven by foreign markets as the United States is heavily saturated.

Facebook Inc (NASDAQ:FB) was unable to grow earnings for the quarter, reporting $0.09 EPS, with the previous year’s EPS at $0.10. EPS remained unchanged due to the company’s expenses increasing by 60% over the same period. Facebook is investing aggressively back into its business in an attempt to generate growth going forward.

Competitive landscape

Google Inc (NASDAQ:GOOG)  has made steady advances with its Google+ services. According to Business Insider, Google Inc (NASDAQ:GOOG) has been able to increase its user figures by 33% from the end of June 2012. Google+ has 135 million active users when compared to Facebook’s 751 million mobile active users figure.

I don’t anticipate Google Inc (NASDAQ:GOOG) to make any significant advances into social marketing as the economies of scale heavily favor Facebook over Google Inc (NASDAQ:GOOG). Facebook has access to both demographic and psychographic data versus Google Inc (NASDAQ:GOOG), which relies on search queries to determine user preferences.

Google Inc (NASDAQ:GOOG)’s growth is likely to be limited in the social space. Google Inc (NASDAQ:GOOG)’s primary avenue of growth is the ad-words and ad-sense business which grew revenues by 21% year-over-year.

Page 1 of 2