Dallas, Texas 12/31/2013 (FINANCIALSTRENDS) – Facebook Inc (NASDAQ:FB) enters 2014, buoyant on high-conversion mobile advertising. Interestingly, it appears to be making more money from mobile advertising on the global market than traditional markets. The overall massive potential in mobile advertising for this social media platform from worldwide markets definitely makes it attractive enough to remain invested or buy more of this stock.
Historically however, Facebook Inc (NASDAQ:FB) has bungled on a few rare moments. The 2012 Initial Public Offering is not yet to be forgotten. That the stock made a quick turnaround in 2013 does offer some reprieve, however.
And this is where the social media networking major appears to be a safer long term stock to remain invested in – for- those who remained invested in it through the debacle of 2012 and in the rough-plod of 2013, now stand to gain. From an IPO rate of $38, back in May 2012, the stock has now gained by over 65.56%. By last week of December 2013, the stock reached a high of $57.96.
Slow growth in comparison to Google
Though Facebook Inc (NASDAQ:FB) has shown incredible march in the months past, a comparison with Google Inc (NASDAQ:GOOG) becomes necessary as investors interested in technology stocks would look to invest in the best potential company. In that sense, Google’s pace of growth has been faster, besides at higher value. Interestingly, the annual inflow for Facebook in the current year was a benchmark which Google achieved back in 2005.
Google Inc (NASDAQ:GOOG) has strong products and services to offer. Time and again it has been the first to monetize its services- be it Adwords or AdSense- and has the technical bandwidth to improve the same and offer more products. Therefore, customers will continue to grow with the company, even as new customers sign-up for the incredible reach Google can build into enterprise or retail businesses. In exacting ways the value for Google Inccomes from its ability to deliver results for companies through its advertising products, which has led to the rich growth of the company. In Very few companies have been able to match the same in terms of quality or reach.
The challenge for Facebook Inc (NASDAQ:FB) here is the fact that it cannot power growth beyond its critical mass or core services. If it can increase its revenues by at least 10 times, then it can achieve the potential to become a stock of higher value.
Comparison to Yahoo is much closer
Facebook Inc (NASDAQ:FB) growth chart is very similar to Yahoo Inc, in many ways. However, Yahoo despite being the first-mover in search engine technology lost out to Google Inc, when it brought in better technology and services. On the other hand, Facebook Inc is not likely to have a competitor of the stature of Google on the social media platform, because of the high levels of segmentation and over saturation.
Duplicating advertising trends
Facebook Inc (NASDAQ:FB) has experimented rather late into its growth monetization through video advertisements. These advertisements are no different from the models already available on the other channels. Neither innovative nor delivering better value, Facebook Inc (NASDAQ:FB) has not been able to differentiate itself from the rest of the advertisement mills and therefore has nothing to drive buyers to its advertising rolls.
Unless Facebook Inc can bring in innovativeness to its products and services of a much higher value, this is not a stock for the long-term investor. At current valuation, Facebook is definitely overrated.