Analysts at J.P. Morgan Securities believe that competing services have minimal impact on the time spent by users on Facebook Inc (NASDAQ:FB) base on their analysis on comScore’s desktop and mobile data in the United States.
The analysts also said that the overall user engagement on the social network giant is fairly steady due to the increasing mobile usage.
J.P. Morgan analyst, Doug Anmuth and his colleagues addressed the market's concerns that other social media services such as Twitter, WhatsApp, SnapChat, and its own Instagram are taking Facebook Inc (NASDAQ:FB)'s share and mobile usage does not compensate the declining PC usage.
In a note to investors, Anmuth and his fellow analysts maintained their positive conviction for the social network giant and that their estimates for the company, for the first quarter of the current fiscal year, are in line with the consensus. According to them, the company is still early in social advertising and its redesigned news feed should help both engagement and advertising. They are optimistic about the new formats and company's products such as the Mobile App Install Ads, Facebook Exchange, and Custom Audiences.
Based on their analysis of competing services on desktop and smartphone data in the United States, the market share of Facebook Inc (NASDAQ:FB) on total internet minutes from March 2012 to February 2013 increased to 14.8 percent.
Its previous total internet minutes shares was 12.7 percent. According to the analysts, the combined market share of other services including Instagram, Twitter, WhatsApp, Snapchat slightly increased from 0.6 percent to 1.8 percent. They emphasized that the “engagement impact from competing social services is overdone.”
In addition, the report said that Facebook Inc (NASDAQ:FB)'s share of mobile minutes doubled from 11 percent to 22 percent while the shares of competing social services went up from 1.3 percent to 4.5 percent.
According to the analysts, they remain bullish on the social network giant because the concerns regarding the company are weak. The analysts maintained their overwieght rating and $35 price target for the shares of Facebook Inc (NASDAQ:FB).
“Our 1Q13 revenue estimate of $1.457B is essentially in line with consensus of $1.438B and we expect advertising revenue growth to accelerate to 46% Y/Y. We think our and Street 1Q13 Ad revenue estimates are achievable as it remains early for News Feed ads and they should continue to have good trajectory, even as Facebook Inc (NASDAQ:FB) potentially gets inventory,” the analysts wrote.