However, Porter Bibb, head of Media Tech Partners, in an interview on CNBC Fast Money hours before the earnings report said, “Home is a non-starter, and they’ve been unable to monetize Instagram.” Bibb flatly stated, “Facebook needs some serious management.” He faulted the company for a lack of a China presence.
Bibb mentioned Sir Martin Sorell, head of WPP, world’s largest advertising company, spent two weeks talking with Google Inc (NASDAQ:GOOG) Plus and was never invited to Facebook Inc (NASDAQ:FB). Jordan Rohan of Stifel Nicolaus said on CNBC after earnings that while Facebook only had several hundred ad sales executives to Google’s thousands or more, he believed that Facebook was “still underowned and underestimated.” And to be fair, Facebook has given advertisers a decent ROI on their ad campaigns: 13X for Samsung, 6X Bud, 5X for Lay’s potato chips.
Meanwhile, Google Inc (NASDAQ:GOOG) missed earnings estimates last week with search ad revenue numbers down. Investors were not feeling the “buzz” as the stock drooped from its high of $928 before earnings to $900 this week. Comparing Google with Facebook Inc (NASDAQ:FB) is difficult as Google Inc (NASDAQ:GOOG) is much more than search ads (Android, cloud, tablets, Google Glass and much more), but it has been the lion’s share of revenue.
Google’s social platform, Google Inc (NASDAQ:GOOG) Plus attracts only a third of the numbers of Facebook, 359 million active users give or take, and they tend not to be as engaged, something advertisers demand.
Google is expensive at a 26 multiple when one compares them to rivals Apple Inc. (NASDAQ:AAPL) and Yahoo! Inc. (NASDAQ:YHOO) with its trailing P/E of 8.77. Although Yahoo! Inc. (NASDAQ:YHOO) whiffed its latest earning report too, the company has been a turnaround story under Marissa Mayer as CEO. Yahoo! bought some attractive assets this last year (summly, Tumblr, Flickr) and the gross margin at 80.90% is stellar. The company is a nascent media empire with its original video content and streaming competing with Google Inc (NASDAQ:GOOG)’s YouTube, Netflix, Inc. (NASDAQ:NFLX), and Amazon.com, Inc. (NASDAQ:AMZN).
So friend us already!
Facebook Inc (NASDAQ:FB) has given you the wink and the nod that it’s safe to fall in like with them, building a position slowly after the earnings oxytocin wears off. Yahoo! Inc. (NASDAQ:YHOO) is still a story I like for its media content and reasonable P/E, and Google Inc (NASDAQ:GOOG) is just a tech behemoth that will continue to preform long-term.
The article Is Facebook Really Your Friend? originally appeared on Fool.com and is written by AnnaLisa Kraft.
AnnaLisa Kraft has no position in any stocks mentioned. The Motley Fool recommends Facebook and Google. The Motley Fool owns shares of Facebook Inc (NASDAQ:FB) and Google Inc (NASDAQ:GOOG). AnnaLisa is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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