Which Social Networking Site Holds the Stock Market Edge in 2013?
Amanda is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Social Networking websites such as Facebook, Twitter, Google+, and others, have taken the Internet by storm and changed how we interact with our peers and the world at large.While these sites are used casually by millions, Social Networking can mean big business to investors. While the public's preference for which Social Networking website reigns king can vary drastically, there is only one who can claim the top spot in earnings and stock market performance and growth.
While highly popular Social Networking websites such as Twitter and Reddit draw in crowds, they are not publicly traded companies and thus will not be considered in this post. Here is a look at the top performing publicly traded Social Networking websites in 2013; the top earning Social Networking website may surprise you.
When you think of Social Networking giants, what is the first name to come to mind? Facebook (NASDAQ: FB) is one of the most popular Social Networking websites available with over a billion users. Their stock remains steady at $28.58, and has experienced significant growth since September 1, 2012. Facebook enjoyed a better than expected fourth quarter 2012 earnings result with $64 million, with its mobile revenue figures doubling in total.
Another highly popular Social Networking website for working professionals is LinkedIn (NYSE: LNKD). LinkedIn is a platform where business professionals can connect, obtain career leads, and build professional relationships. According to an article released by the New York Times, LinkedIn's revenue increased by 86% in 2012 alone. For 2013, LinkedIn has set its sights on a targe revenue of $1.4 billion; a goal that the networking website should have no problem achieving. LinkedIn's stock stands at $151.20 at the time of this publication, and they have enjoyed a 18.26% positive stock price growth ratio in the past six months.
Google (NASDAQ: GOOG), the search engine giant is the owner of two major Social Networking webites: Google+ and YouTube. According to Google's end of year financial summary for 2012, the search engine giant exceeded $50 billion in revenue for 2012, and revenues were up 36% in comparison with the end of year financial summary for 2011. Google has a firm edge on the competition due to the various Social Networking platforms they offer, along with a wide variety of productivity apps, premium search engine, and more.
Trip Advisor (NASDAQ: TRIP) is a Social Networking website that allows users to post reviews about their travel destinations, research hotel and attraction ratings, and collaborate with friends. In the past three months, Trip Advisor has experienced a 37.61% stock price growth, and their stock now stands at $47.02 and continues to rise. In 2012 alone, Trip Advisor's net income increased to $33.7 million, up from $22 million in 2011. The travel website's revenue enjoyed a 23% increase, totalling in at $169.4 million.
Another popular Social Neworking platform is Zynga (NASDAQ: ZNGA). Zynga allows users to play games online, while connecting with others. Zynga's stock in on the rise with a sudden surge. In the past 90 days, Zynga's stock value has doubled in price with a growth margin of 58.8%. At the time of this publication Zynga's stock cost $3.43 per share. Zynga reported better than expected fourth quarter profit and sales figures with sales totaling more than $311.2 million.
The Bottom Line
Facebook may be tops in terms of popularity and visibility, but it has major competition in the finance world. In terms of revenue growth, no social networking website can hope to exceed the 2012 performance by LinkedIn. The social networking website that was designed for working professionals posted a 86% increase in revenues in 2012 alone. LinkedIn is not the only social networking website with impressive figures, though.
When you compare the total earnings and future earning potential of all the major social networking websites, Facebook holds the market edge. While Google as a whole is the more lucrative of the two companies, it is not fair to compare Facebook's Social Networking site with a company that has their hands in many different sectors of online business, including productivity apps, web search, adsharing, and more. Additionally, Google's growth in 2012 had a lot to do with their acquisition of Motorola, and had little to do with the success of Google+.
In an isolated study performed in October of 2012 that reviewed which Social Networking sites web users were using most, Facebook had a significant lead over the rest of the pack with 62.62%, giving them a definite market edge. With proven growth, increased membership and continued popularity, Facebook is the Social Networking site that has the market edge in 2013.