Google Inc (GOOG), Facebook Inc (FB): The Social Giant’s Emerging Market Foothold

Investors have reacted by pushing the stock some 40% off of its highs. That’s left it with a PE of around 12 and a dividend yield of approximately 2.8%. Management has reacted by starting to introduce services like iTunes Radio. This is an ad-supported radio service that will be native on Apple’s mobile devices, giving it a built-in user base.

Although Google’s Android has a much larger market share, Apple Inc. (NASDAQ:AAPL) customers tend to be very loyal. That makes its users almost like a network of customers. If it can tap into those customers in more ways, it can build a revenue base that’s annuity like instead of relying on individual product sales. That’s roughly similar to what Facebook is trying to do.

Watch the Shift

Keep an eye on this shift, because the companies that can attract, keep, and monetize customers in their networks will likely be long-term winners. Facebook is pushing this model into emerging markets before others get there. That should be a good long-term investment. Apple and Google, meanwhile, are more established companies trying to figure out a new landscape. Of the two, Google’s shares are pricing in success. That could make Apple a better long-term buy.

Reuben Brewer has no position in any stocks mentioned. The Motley Fool recommends Apple, Facebook, and Google. The Motley Fool owns shares of Apple, Facebook, and Google.

The article The Social Giant’s Emerging Market Foothold originally appeared on Fool.com and is written by Reuben Brewer.

Reuben 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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