There aren't many targets left on Facebook's hit list.
Web traffic watcher Compete.com released its data for the month of January last week. The big nugget: Facebook has overtaken Yahoo! (Nasdaq: YHOO ) to become the country's second most popular website.
Attracting nearly 134 million unique visitors last month is impressive, but the real prize here is that we know that folks are spending a ton of time on the social-networking site. They're playing social games, sharing digital snapshots, and keeping tabs with friends and family through status updates, private messages, and online chat.
We all know how Facebook's stickiness bodes well for the dot-com darling. How about the stocks that won't be as fortunate? If someone is spending hours tending to their crops on FarmVille or chatting with a former colleague, where did that time come from? It obviously isn't incremental, so there have to be some companies -- and investors should note that there have to be some public companies -- on the losing end of the Facebook bonanza.
I'm going to go over four companies losing out because of the time-suck that is Facebook. Then I'll hand it off to you to suggest some other potential losers.
GameStop (NYSE: GME )
I've been down on the video game retailer for some time -- and rightfully so. It's not just that 2009 was a bad year for the video game industry. When the sector bounces back, a good chunk of that will come from digital distribution where console makers and some developers rake in the high-margin splendor but GameStop gets left out in the cold.
Now shovel over a heaping portion of Facebook over GameStop's grave.
Whenever I dismiss GameStop as a casualty of social gaming, diehard gamers let me have it. How dare I compare the petty social mob hits on Mafia Wars to the rich splendor of Grand Theft Auto IV or Call of Duty: Modern Warfare 2? Master Chief and Big Daddy laugh at your virtual Pet Society critters.
This has never been the point. It's all about time. If folks are playing free ad-supported games online, it's less time for them to fire up their consoles and play. This dries up demand, and GameStop is an easy frontline kill.
Shutterfly (Nasdaq: SFLY )
I've been a fan of the digital photofinishing site since before its IPO. I have a few of Shutterfly's photo books of family treks around the house. Unfortunately, it's easy for me to see that Facebook has now become the photo-sharing hub of cyberspace. Folks just don't need to order digital prints the way they used to, since cloud computing pioneers are perpetually hosting the images.
Shutterfly has held up well so far. Earnings grew faster than expected during the photo-sharing site's seasonally potent holiday quarter, with revenue soaring 22%. However, the company is targeting just 9% to 13% top-line growth in 2010. The company can't be immune to Facebook's digital photo dominance and the gradual decimation of photofinishing prints forever.
Barnes & Noble (NYSE: BKS )
Everyone seems to be concerned about how the leading bookstore chain will hold up against Amazon.com's (Nasdaq: AMZN ) Kindle and next month's debut of Apple's (Nasdaq: AAPL ) iPad, but this isn't just about the e-book revolution (where it has a little skin in the game with its own Nook reader).
B&N's comparable-store sales during the holidays fell 5.4%. And, no, it didn't see this coming because the bleak Christmas forced it to hose down its guidance.
A bibliophile can argue that checking status updates and chasing links to interesting articles and video clips is no substitute for a good book. The bookie would be correct, but -- just as I explained in the GameStop thesis -- this is more about the quantity of time than the quality of the experience. If someone is chatting away with friends on Facebook at night instead of curling up to a mystery novel, you don't need to be a super sleuth to figure out that the person is going to go through fewer books.
Comcast (Nasdaq: CMCSA )
Facebook vs. television? Yes, it's going to leave a dent. The country's largest cable company is already shedding video subscribers. It's making back that ground through broadband access and digital phone service, but those are competitive -- and cutthroat -- markets.
Comcast isn't going to go down without a fight. It is doing the right thing by spearheading the TV Everywhere initiative to make its cable subscriptions more valuable. The rub here is that if folks are spending more time on social networking site -- and less time on the boob tube -- it won't matter. The perceived value of a costly cable or satellite television subscription will continue to diminish.
Your turn
As promised, the ball is now in your court.
These are just four stocks that I think can be in for some heady turbulence if Facebook continues to draw in wider audiences that spend more and more time on the site. There are more. A lot more. Use the comment box below to share your candidates, or simply to dispute my theory.
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