There are a great many heavyweight battles taking place in the tech space right now with many of the biggest companies offering devices and services in direct competition with each other. One of the more overlooked battles in 2013 has been the fight between Google Inc (NASDAQ:GOOG) and Facebook Inc (NASDAQ:FB), with Google seeming dominant in the early part of the year. That’s changed recently, and now it’s clear that the ad fight has begun.
A new report from Cantor Fitzgerald analyst Youssef Squali comes down positive on both companies as the online advertising market continues to improve. If Google Inc (NASDAQ:GOOG) manages to remain in its dominant role it will leave little for Facebook Inc (NASDAQ:FB) to pick up in the long run.
Facebook on the rise
Facebook Inc (NASDAQ:FB) shareholders would clearly not be happy with that position, and the company is doing everything it can to differentiate itself from Google Inc (NASDAQ:GOOG) right now. Both of these companies offer advertising platforms, but Facebook has something that Google does not offer, personal connections with customers.
The most recent earnings report from Facebook Inc (NASDAQ:FB) made investors optimistic about the company for the first time since it went public last year. Shares hit their highest level ever in Monday’s trading. The company’s current market cap values it at more than a third of Google Inc (NASDAQ:GOOG). Investors think Facebook Inc (NASDAQ:FB) is going to really compete with Google in the future, and there seems little Google can do about it.
Facebook’s walled garden
Facebook Inc (NASDAQ:FB) is still the website with the most user engagement according to July numbers from comScore. Despite doom and gloom predictions from some analysts, the company has managed to bring in advertising in a profitable and useful way without destroying the experience for users.
Facebook Inc (NASDAQ:FB) is building itself a home on mobile devices that helps to advertise to customers and improves its advertising. The company has been fast to respond to challenges in recent months, and it’s improved its earnings much more quickly than analysts expected. Google Inc (NASDAQ:GOOG) has a real competitor in Facebook, and it has to come to terms with that change; its social empire isn’t working.
Google Inc (NASDAQ:GOOG) has not had a challenger in its advertising business in years and it’s previous attempts to challenge Facebook have been lackluster; David may have the advantage in the coming battle.