Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

LinkedIn Corp (LNKD), Google Inc (GOOG): Where Does Facebook Inc (FB) Go from Here?

Facebook Inc (NASDAQ:FB)’s initial public offering in May 2012 valued the company at $104 billion, the largest valuation to date for a newly-public company. The company’s stock debut at $38 per share was a disappointment as investors saw their investments dwindle to $17.73 per share by Sep. 4, 2012.

Facebook Inc (NASDAQ:FB)

Since its IPO, Facebook Inc (NASDAQ:FB) shares have undergone significant analyst scrutiny. They have been buffeted by ambiguous earnings, and until recently were held down by a poorly-monetized mobile business. Following its latest earnings release on July 25, shares of Facebook Inc (NASDAQ:FB) rocketed to $34.36. This rally puts the company just 5 points shy of its issue price. To push its stock prices to new highs, Facebook Inc (NASDAQ:FB) must continue to monetize its mobile user base as it has finally begun to do.

Facebook Inc (NASDAQ:FB) surprises Wall Street

The company’s second quarter report came in well above consensus estimates. Analysts had Facebook Inc (NASDAQ:FB) earning $0.14 per share on $1.6 billion in revenues. The earnings release, and the following earnings call, reiterated how wrong the analysts were. Facebook brought home over $0.19 per share and $1.81 billion in revenues on a 1% increase in operating margins.

Where Facebook hit a home run was with its mobile subscriber base. The ads placed through their mobile platform now generate over 40% of the company’s current ad sales, which is a 11% uptick year-over-year. This monetization is substantial, especially when considering that Facebook’s rival Google Inc (NASDAQ:GOOG) continues to have problems translating mobile ads into increased revenue.

Where Facebook’s competition stands

Google Inc (NASDAQ:GOOG)’s latest earnings release last week was disappointing to Wall Street. Its earnings-per-share was $1.22 below the consensus estimate. Google Inc (NASDAQ:GOOG) noted in its conference call how it has been struggling to squeeze ad revenue from its mobile customers. This is a surprise for investors as the company’s stock inched its way to all-time highs. That being said, I wouldn’t count Google out just yet as the global conglomerate seems to make a way where most businesses would fold under the pressure. I would not recommend buying Google shares at this price, however; it would be better to hold out for a pullback.

LinkedIn Corp (NYSE:LNKD) being the more mature of the social networking group, has over 225 million members. This translated into second quarter revenues of $324.7 million, a 72% increase from the same period last year. The number of registered members is also a 36% year-over-year increase. The key number is the company’s online sales of $140 million, which is 43% of net revenue.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.