This week, we saw some significant developments related to Facebook (NASDAQ:FB) & Google (NASDAQ:GOOG), which could impact its value in the coming quarters and years. While Facebook is focusing on how it can better monetize its massive mobile user base, Google is trying to make a break-through in social, an area in which it has been struggling since years.
Facebook’s stock has completely tanked since it went public and is now trading well below its initial price. However, while it may be trading at a deflated valuation right now, we believe that its long term prospects are pretty encouraging, and it will eventually be worth much more. It also launched App Center on iOS and Android, its own app store powered by social discovery.
In addition, it also launched new mobile ad options, which should help it better monetize its mobile audience, concerns about which have been one of the main reasons behind the fall in its stock price. It also revealed a new mobile payment offering which should help it improve the transaction volumes by simplifying the transaction flow. It was also revealed that Yahoo and Facebook may be working to settle their differences and call a truce on their patent disputes.
We currently have a $33 Trefis price estimate for Facebook, which stands nearly 30% above its market price.
Google was in the news primarily because of two significant acquisitions. It acquired Meebo, which started out as multi-platform chat client but pivoted to become a social toolbar and advertising platform. Meebo’s flagship product, the Meebo Bar, enables website owners to share content on social networking sites and save it. It also enables them to monetize traffic by displaying ads within the toolbar. Since the Meebo Bar already has a huge installed base, Google could leverage that to drive the usage of Google+. We expect Google to integrate Meebo’s services into Google’s own social offerings.
It also acquired Quickoffice, one of the most popular mobile office suites with an installed base of more than 300 million devices. Acquiring Quickoffice could help Google quickly expand its mobile offerings, and integrate them with Google Docs and Google Drive to offer a complete cloud-mobile office apps solution.
We currently have a $680 Trefis price estimate for Google, which stands nearly 15% above its market price.