Google Inc (GOOG) & Facebook Inc (FB) Are Both Looking Solid

In the second quarter of 2012, Facebook Inc (NASDAQ:FB) reported $0 mobile revenue. In the second quarter of 2013, the social network raked in a whopping $656 million in revenue, or 41% of the company’s total advertising revenue. Should Google Inc (NASDAQ:GOOG) be worried? Not at all.

Facebook’s impressive gains
Recent data from eMarketer suggests that, not only is Facebook Inc (NASDAQ:FB) making impressive progress in mobile advertising, but it’s also making huge gains in market share in the mobile ad market. Compared to 2012, when the company first began monetizing mobile, the company’s market share of total mobile Internet ad revenue worldwide is expected to triple in 2013, from 5.35%, to an estimated 15.8%, according to eMarketer’s estimates.

Source: Data retrieved from eMarketer. 2013 based on eMarketer forward-looking estimates.

eMarketer asserts that Facebook Inc (NASDAQ:FB)’s growth in mobile ad share is due to the company’s “continued emphasis on mobile monetization, along with its users’ ongoing shift toward mobile devices.”

Meanwhile, Google Inc (NASDAQ:GOOG) gained just under one percentage point in market share during this same period, from 52.36%, to 53.17%. If Facebook Inc (NASDAQ:FB) is gaining market share more quickly than Google, doesn’t this imply that Facebook is eating into Google’s opportunity? Nope.

Not at Google’s expense
There are two key reasons why Google Inc (NASDAQ:GOOG) shouldn’t be worried about Facebook Inc (NASDAQ:FB). One, Facebook’s gain came mostly from internal opportunities.

In the first half of 2012, before Facebook Inc (NASDAQ:FB) monetized mobile, about 57% of the company’s 955 million monthly active users were from mobile. That was a massive opportunity — and Facebook capitalized on it. And, today, even more of Facebook users are mobile: 71% of its 1.15 billion monthly active users, in fact.

Most of Facebook Inc (NASDAQ:FB)’s market share gain, therefore, came from figuring out how to effectively monetize its mobile users, combined with its fast-growing mobile user base. Its gains did not come at Google Inc (NASDAQ:GOOG)’s expense.