The two biggest names in the internet today are Google (GOOG) and Facebook (FB). Each company has a lot going for them, and both have their eyes on knocking out the other. When it comes to social media, Facebook is the undisputed champion, but when it comes to search Google remains in the drivers seat.
But which stock wins in a head to head battle? The clear winner has always been, and remains Google.
Google has tried to make a name in social media with Google+, but it has just not been pose a serious challenge to Facebook. Facebook, on the other hand, is trying to become the go to place for search, but it is doubtful if it will be able to pose any real threat to Google for the foreseeable future.
Last week Facebook announced it was going to launch graph search. While the search may help Facebook keep users on its site longer, it is hard to imagine that the company will be able to really boost revenues with its search. It is very difficult for any company to expand outside of its comfort zone, and that is exactly what Facebook is trying to do.
Facebook is great in the social media business. They have such a dominant position in the market that it is hard to imagine another company sweeping and taking over. Facebook users are very loyal, so much that they spend on average around 7 hours a month on the site. The problem is that Facebook has yet to really figure out a way to monetize this usage… especially on the mobile front.
What Facebook really needs to do is focus on its mobile business. Its mobile user base is quickly growing, but so far Facebook has been able to capitalize on this growth.
It’s a tough game that Facebook is trying to play. Its users love the social aspect of the service, but as a company Facebook has to beef up its advertising. The question is how much advertising can it present to its users before it starts to impact the user experience. Too little advertising and investors will punish the stock, but too much advertising and its users will jump ship. Its going to be very tough for Facebook to appease everyone.
For Google, while it would be nice if it could find success as a social media outlet, it is not essential for the company. It already controls search, and will continue to do so, and that is what puts it clearly ahead of Facebook.
Disclaimer: The author of this article has a long position in Facebook (FB).