What's Good For Facebook and Pandora Is Bad for Google and Apple

In the age of mobile ads, the heavyweights are losing the upper hand. According to a recent report from IDC, the mobile display ad market is being taken over by publishers like Facebook (NASDAQ: FB  ) , Pandora Media (NYSE: P  ) , and Twitter. That's good news for those companies, and bad news for incumbent ad networks from Google (NASDAQ: GOOGL  ) , Millennial Media (NYSE: MM  ) , and Apple (NASDAQ: AAPL  ) .

Overall mobile ad spending continues to rise, jumping 88% in 2012 to $4.5 billion. IDC pegs Facebook as the top mobile display ad seller with $234 million in gross revenue. Pandora follows that with $229 million, with Twitter ranking third at $117 million.

Facebook had zero mobile ad sales in 2011, but made a big push into mobile ads in 2012 starting with Sponsored Stories. Anyone paying attention to the social network's enormous IPO is likely well aware of the criticisms at the time that Facebook lacked a mobile monetization strategy. That's changed by now, and Mark Zuckerberg is on a mission to dispel the myth that Facebook can't navigate the mobile transition.

Pandora's free ad-supported service has been around a long time, but only recently did the online radio streamer go public. However, Pandora's costs scale up alongside revenue, making it much more difficult for it to put up a profit compared to the social network.

Within the ad network market, Google remains top dog with an estimated $243 million in revenue last year. Millennial Media, who also went public in 2012, overtook Apple for second place. Millennial generated $151 million in sales, topping Apple's $125 million.

Google naturally still owns the mobile search ad market, with $2.2 billion in revenue and a 79% market share, but none of the aforementioned rivals meaningfully competes in search.

However, Apple doesn't care too much about its iAd network relative to its core device business. The Mac maker made it clear from the beginning that iAd's whole purpose was to help developers offer free apps by providing an alternative method of monetization.

The new guys on the mobile ad block are chipping away at the incumbent heavyweights.

As one of the most dominant Internet companies ever, Google has made a habit of driving strong returns for its shareholders. However, like many other web companies, it's also struggling to adapt to an increasingly mobile world. Despite gaining an enviable lead with its Android operating system, the market isn't sold. That's why it's more important than ever to understand each piece of Google's sprawling empire. In The Motley Fool's new premium research report on Google, we break down the risks and potential rewards for Google investors. Simply click here now to unlock your copy of this invaluable resource.


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