Midweek Infographic – Facebook vs Google

A small tech company went public recently.  The news hasn’t covered it much so you may not have heard of the tiny Menlo Park firm by the name of Facebook.  Obviously, I’m being a little sarcastic here.  The onslaught of news coverage and investor interest has been tiring to say the least.  You would think that with such high demand and the massive amount of “likes” around the web, the IPO would have been a huge success…not so fast.

NASDAQ trading problems aside, investors have been asking a lot of questions about Wall Street’s largest tech IPO.  Facebook raised $16 billion making it the third largest IPO behind Visa and GM.  Compare that $16 billion that that of the $1.67 billion raised by Google in 2004.  With staggering numbers like that, you would expect Facebook to be demolishing Google when it comes to advertising right?  Let’s get a better picture by looking at an infographic provided by Wordstream.

While Facebook holds its own in the beginning, it starts to fall behind Google when it comes to ad targeting and ad formats.  The big complaint about Facebook is the fact that it can’t capitalize on mobile ad revenue.  When 50% of the traffic is from a mobile device, that’s not a good thing.  Maybe this is why GM pulled its advertising just moments before Facebook started trading on the secondary market.  From a user stand point, the unobtrusiveness of ads is great.  However, from an advertisers perspective, their ads must be seen and clicked on.

As a newly traded company, the future is still unknown for Facebook.  The user base is there, so technically they have the audience.  They just need to figure out how to present their ads in a way that’s intuitive and beneficial for all, especially the advertisers.  One thing’s for sure – this will not be a residual outcome from entering the cellphone hardware business.

Readers:  Who made the mistake (for now) of investing in Facebook stock?  Who attempted to buy shares but was unable to because of the NASDAQ execution issues?  

Do you think Facebook will improve the effectiveness of its ads and become a threat to Google?

Join our newsletter

Get financial tips from a licensed professional directly to your inbox.

Powered by ConvertKit

Comments

  1. Nathan Duke says:

    I think Google will only improve the effectiveness of its ads and become an even bigger threat to Facebook. Facebook is cool, but it will have to make a huge change in its business model in order to be able to really capitalize on its user base. Any kind of broad change in business strategy like that rarely works out. I just don’t see that FB is a company that’s going to be a big player in the tech industry over the long term.

    • Google will also increase its ad penetration. I was not a big user of G+ before the recent update, but I find myself exploring the site more and more now. The new “hot” category is a great alternative to Twitter. As I use the site more, I also use G+ search more which in turn, leads to more ads. I’ve never searched for anything on Facebook.

  2. Spanky says:

    I think Facebook has the most immediate upside and can instantly double their ad impressions simply by adding them to mobile. You’d gotta think that announcement is coming soon and boy won’t you be wishing you had some calls on it.

    • Their mobile advertising numbers are so bad, they can only get better. I think something like a Facebook phone is a horrible idea though. Maybe my assumptions will be wrong, but I immediately think of a product that somebody in grade school will be carrying around.

  3. I feel like, if Facebook hasn’t figured out their business yet, they aren’t likely to just because they went public. This was a chance for investors to finally cash in on the hype.

    • Even though the business plans of Facebook and Google are very similar, you’re right JP, Facebook’s mission is entirely different. Both companies want to attract the most amount of users – that way they can reap the benefits and rake in the advertising dollars.

      However, Google appeals to the advertisers and gives them a great return on their investment while Facebook focuses on the user. That’s great from the users perspective, but something needs to be altered to increase the advertiser’s return.

Speak Your Mind

*