quick succession, both Californian giants have released their annual results this week. Generally welcomed by financial analysts, the trajectories of Google and Facebook know yet some differences. If Facebook speeds on mobile and sees advertisers pay full price advertising, Google posted a lower growth and saw its average price per click rather decrease. A development likely to worry? Duel.
On the results
net profit of Facebook jumped to $ 1.5 billion on the full year 2013, of which only 523 million generated in the fourth quarter where it was multiplied by 8 over one year. Sales has it increased by 55% to flirt with $ 8 billion throughout the year. Acceleration that is felt in the last quarter (63%). As advertising revenues, which represent the bulk of the group’s revenues, they have even soared 76% in the last three months of the year.
GoogleAccording to results released Thursday, net income for the # 1 Internet grew “only” 20% in 2013 to 12.9 billion dollars. total sales increases it by 19% to $ 59.8 billion .
Balance
latest quarterly results show that Facebook’s revenue increased 3.5 times faster than Google, thanks to sales of online advertising. But this growth is normal because Google is largely bigger than Facebook. Google makes about 9 times more sales and garnered nine times more profits. And its rate of return is better than Facebook (21.6% against 18.75%) , even if the younger end of 2013 has seen its profitability and growth acceleration.
Advantage Google
On Mobile
from mobile advertising, closely watched on Wall Street, continues to increase. It represents the fourth quarter (Q4), 53% of turnover, against 49% in the previous quarter. What is telling Sheryl Sandberg , the number two in the group that Q4 revenues were “almost as important as all of our advertising revenues in the fourth quarter of the previous year.” Good news, knowing that they were still lacking there 18 months. What was the concern No. 1 during its IPO
Google is rather quiet on the issue. The giant did not disclose the percentage of its revenues resulting from mobile advertising. But some Wall Street analysts believe that it is between 15 and 20% of total turnover , which represent the last quarter between 2.4 and 3 billion, two times more than the mobile Facebook activity. But in addition to advertising, Google derives significant revenue from the sale of mobile content and applications in the Google Play store. Where at the same time, Facebook punishment (for the moment) to develop its apps (Instagram head).
However, on the hearing, Google’s services are ubiquitous on smartphones. According comScore.com site, they would receive 87% of mobile applications through its navigation and audience. Just before Facebook, the second with 85%.
BalanceIf
overall advertising revenues of Google are rising (despite lower unit prices, see below), accelerates Facebook on mobile through more targeted campaigns. And therefore more expensive.
Advantage : FacebookOn the market in general
2013 Facebook has become the world’s number two online advertising and mobile . But with market share by 5.7% and 18.44% on these two sectors Mark Zukerberg is still far from the hegemonic Google (32.4% of market share online advertising, 53.17% of the mobile), according to estimates by the specialist firm eMarketer. Advertising revenues, which represent the bulk of the income of the group, even soared 76% in the last three months of the year to $ 2.34 billion.
However, the trend is as encourage Facebook. “Facebook is increasing its margins and still increasing its user base enough to satisfy shareholders,” summarizes the site 247wallst.com analyzes.
good news side is that Google sees progress (+31% in Q4 2013) again the number of clicks on banners at the top of search pages. A strategic issue for the firm because it is on these ads that the group pays to advertisers. This increase can partly compensate for other changes to the much less favorable. Prices click is down 11% year on year, from -2% in the last
long in the shadow of the Appstore, Google Play is also growing rapidly. In addition, the search engine has recently reported that sales of Chromebook, smartphone, or tablet Nexus, experienced “a period of strong parties.”
Advantage GoogleConclusion
Google remains the undisputed world No. 1 Internet with an overwhelming share of advertising volumes. Now it looks more to diversify its revenue by multiplying the products and services. Its business model therefore becomes more powerful. But growth Facebook social network a serious candidate to become the leading mobile ad . Data users are valuable and allow the site to “overpay” targeted advertising. But Facebook is expected to turn innovation. Valued just over $ 150 billion, Facebook is still far from Google (381000000000). But outperformed its opponent for six months.
DR
Evolutions performance share price of Google (blue) and Facebook (red) between one year (Decree 31 January 2014).
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