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Google vs. Facebook

Tuesday, January 22, 2013 - 02:13

Jan. 22 - Google's better-than-expected earnings provide more proof beating the top search engine will be a formidable challenge for Facebook. Bobbi Rebell reports.

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Google earnings clicked with investors- shares rose in after hours trading after its results beat forecasts. Total revenues were up 36%. While the trend of lower cost-per-click continued- paid clicks were up. Greencrest Capital's Max Wolff: SOUNDBITE: MAX WOLFF, SENIOR RESEARCH ANALYST, GREENCREST CAPITAL (ENGLISH) SAYING: "You are getting more clicks and when the number of clicks increases more than the revenue per click declines. You are likely to get the kind of 8, 9 percent quarter over quarter and triple digit or double digit sorry 35% year over year growth that we saw. So, good number." Google introduced new product listings and grew its international business. Google is also more than holding its own in what Wolff calls the new law of tech- everybody is in everybody's business- especially when it comes to Facebook- which recently announced it wants in on search. SOUNDBITE: MAX WOLFF, SENIOR RESEARCH ANALYST, GREENCREST CAPITAL (ENGLISH) SAYING: "Search is huge for delivery ads. The reason Google is, in terms of revenue, much more successful than the sort of display advertising is we know there is intent. So when later on today you go and you look up Prada handbags I know that you are probably in the market for a Prada handbag. Whereas, mention the word Prada in your social engagements with someone else ala Facebook and they serve you an ad there are a couple of problems." But the Facebook ad doesn't deliver value to the advertiser if you were just talking about the item, with no intention to buy it. For investors- the stocks present different pictures as well. Facebook has fallen close to 20% since its debut in May. But in that same time, Google has gained almost as much. Sarat Sethi, portfolio manager at Douglas C. Lane says the better investment depends on how much risk an investor wants to take: SOUNDBITE: SARAT SETHI, PORTFOLIO MANAGER, DOUGLAS C. LANE (ENGLISH) SAYING: "Google is a pretty established company. They have got recurring revenue. They are growing over 10 percent a year. And if you want to play advertising, mobile, that is a good place to play. Facebook is a phenomenal company. The question of Facebook is A: it's pretty highly valued, and B: you are really betting that mobile advertising is going to work." But based on Google's recent stocks returns and the reaction to its earnings- investors are already finding value in and betting on- Google.

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Google vs. Facebook

Tuesday, January 22, 2013 - 02:13

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