Facebook Inc (FB), Google Inc (GOOG), Yelp Inc (YELP), Millennial Media, Inc. (MM): 4 Stocks to Play the Mobile Ad Market

Yelp Inc (NYSE:YELP) occupies a smaller niche and has recently experienced a run up on the back of better than expected earnings. Unfortunately the run up may be a bit premature, earnings were better than expected but the company still posted a loss. Similar to Facebook, Yelp Inc (NYSE:YELP) depends on user-generated content to thrive and is facing pressure from multiple competitors. From an operations standpoint the company is lackluster with revenue growth just recently managing to significantly outpace operating expense growth.

YELP Total Operating Expenses and Revenue Quarterly data by YCharts

While the company is making positive headway, it’s in a weaker position than the other stocks mentioned above largely because of them. Pressure from Google and Facebook could ultimately push Yelp Inc (NYSE:YELP) completely out of the equation as both have direct competitors. In Google’s case not only does it have a direct competitor in Zagat, it also has many ways to scale the service and drive traffic to it. Yelp Inc (NYSE:YELP) is the best regarded review site and benefits from incumbency, but it’s still in a precarious position.

The bottom line

Ultimately it boils down to execution. Mobile advertising will continue to grow at a breakneck pace for the foreseeable future and the companies that position themselves to ride the wave stand to gain tremendously. For my money I think Google offers the safest play on the mobile ad market, but the others do have their own merit.

The article 4 Stocks to Play the Mobile Ad Market originally appeared on Fool.com and is written by Chris Moore.

Chris Moore has no position in any stocks mentioned. The Motley Fool recommends Facebook and Google. The Motley Fool owns shares of Facebook and Google.

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