Facebook could be a winner
The company recently launched its hash-tagging service, giving it the leverage it needs to fight off openly social environments on the Internet.
I believe that Facebook Inc (NASDAQ:FB) will remain the most dominant social network. The problem lately has been a lack of certainty behind the company’s mobile strategy. Mark Zuckerberg talked about monetizing mobile with advertising in the annual shareholder meeting. But what I really think he’s up to is creating add-on services and alternative ways to monetize Facebook Mobile.
Analysts have mixed feelings over Facebok’s growth initiative. The company’s spending on research and development grew by 871.5% since the IPO. This spending isn’t going to have a guaranteed success rate, as was proven by the high-profile failure of Facebook Inc (NASDAQ:FB) Home.
Going forward, investors should be loading up on the stock rather than looking to make a quick buck. This is because it is not going to stage a significant rally until the company has found new ways to monetize Facebook Inc (NASDAQ:FB) mobile or created other unique products that have significant monetizing capability.
Yahoo! the famous hedge fund
Okay, it is a bit of an exaggeration to call Yahoo! Inc. (NASDAQ:YHOO) a hedge fund. But let’s not deny the company’s success at acquiring companies. Examples of this would include Alibaba.com, which worked out into a significant return on investment (Yahoo!’s stake in Alibaba was sold at $7.1 billion, while the company’s entry point was $500 million.)
In its most recent quarterly earnings announcement, Yahoo! Inc. (NASDAQ:YHOO) was able to grow the number of paid clicks it received by 16%, though the growth was offset by a 7% decline in the price per click. What’s more interesting, though, is the expectation of stabilizing ad spending from developed markets in 2014, based on the earlier ad statistic from Magna Mobile. Based on the aforementioned projections, it is likely that the price per click will stabilize. Companies in developed markets (Europe) will feel more confident and will spend more, thus leading to a price hike on ads.
Going forward, analysts on a consensus basis anticipate the company to grow earnings by 13.53% on average over the next five years. The growth in earnings is likely to be sustainable based on the company’s acquisition strategy, economic headwinds, and cost-cutting efforts.
Conclusion
Google Inc (NASDAQ:GOOG), Facebook Inc (NASDAQ:FB), and Yahoo! Inc. (NASDAQ:YHOO) are attractive growth investment vehicles. I really like Yahoo!’s bottom-line growth strategy and believe that it has a lot of potential going forward. Google, on the other hand, has a diversified set of business segments and complements diversification with high rates of revenue and net income growth. Facebook Inc (NASDAQ:FB) will remain the most dominant social network, and has the up-side surprise of creating new products or using rapid cost-cutting to stimulate net income growth.
Alexander Cho has no position in any stocks mentioned. The Motley Fool recommends Facebook and Google. The Motley Fool owns shares of Facebook Inc (NASDAQ:FB) and Google Inc (NASDAQ:GOOG).
The article 2014 Looks Bright for Google, Facebook, and Yahoo! originally appeared on Fool.com.
Alexander is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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