Strengths
Facebook, the world's largest social network, has 1.44 billion monthly active users (MAUs) worldwide. Unlike rivals Twitter (NYSE:TWTR) or LinkedIn (NYSE:LNKD), Facebook is consistently profitable on a GAAP basis.Last quarter, mobile advertising revenue accounted for 73% of Facebook's advertising revenues, up from 59% in the prior year quarter. Total ad revenues rose 46% annually as its average revenue per user (ARPU) climbed 25% to $2.50. Unlike Google, Facebook limits the number of ads it displays every quarter. This strategy -- which emphasizes quality over quantity -- caused Facebook's average price per ad to soar 285% annually last quarter as ad views fell 62%.Research firm eMarketer estimates that Facebook generated $3.54 billion in mobile display ad revenues in the U.S. last year, more than triple Google's $1.13 billion. Unlike Google's scattered network of display ads, most Facebook ads are displayed within its News Feed.
Last year, Facebook beefed up its video delivery platform for video ads, and launched its own embedded video system to challenge Google's YouTube. Facebook uses single-sign ons (SSOs) in third-party apps and sites to tether users to its News Feed, which gathers data for marketers. Thanks to its strength in social, users are often more inclined to use Facebook's SSOs instead of Google's.
Weaknesses