Is Google Inc (GOOG) or Facebook Inc (FB) a Better Bet in Digital Advertising

Both companies face privacy risks due to the nature of their business. For them to provide the effective advertising platform that they do; they need to have data on their users. Facebook, however, is more at risk to these privacy issues. Facebook users put their personal information online when using Facebook, and this makes it imperative that Facebook correctly monitors privacy issues. Beyond government scrutiny, Facebook needs to make users feel safe enough to put their lives online. Meanwhile people who use Google products such as search, maps, or YouTube are much less likely to feel threatened about Google Inc (NASDAQ:GOOG) keeping tabs on things they looked up in the past.

Google’s first place position in digital advertising comes from them not just making search advertising money, but also display advertising money whenever somebody views a YouTube clip or visits a Google site. In fact Google has recently taken the top spot in display advertising, Facebook’s bread and butter, away from Facebook, and is expected to hold this lead. While Facebook is dependent on users continuously spending more time on Facebook Inc (NASDAQ:FB) and viewing the display ads; Google can make money in more ways than one.

Making the Bet

The extra risks Facebook faces along with Google Inc (NASDAQ:GOOG)’s broader online presence is why Google is the better company for making a bet on digital advertising. The fact that Facebook Inc (NASDAQ:FB) is valued at significantly higher ratios further supports investing in Google. Quite simply Google has a stronger position in online advertising, faces fewer threats to that position, and is cheaper to invest in.

The article Is Google or Facebook a Better Bet in Digital Advertising originally appeared on Fool.com and is written by Xuebing Wang.

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