Is Facebook Cashing In on Google's Opportunity?

New data from eMarketer suggests that Google (NASDAQ: GOOGL  ) may lose market share of ad revenue dollars in mobile this year. With Google's share declining, and Facebook's (NASDAQ: FB  ) gaining nicely, investors could be tempted to conclude that Facebook is a threat to Google. But despite Facebook's fast-growing revenue, this isn't the case.

Facebook's new premium video ad product. Source: Facebook's official For Business blog.

The data
Total mobile Internet ad revenue spending will increase by 75% in 2014, according to eMarketer. This is great news for both Google and Facebook, two digital advertising companies both trying to succeed on mobile devices. eMarketer estimates this growth will boost Google and Facebook's mobile ad revenue by $5.87 billion and $3.68 billion, respectively.

But Facebook's $3.68 billion estimated gain is on a much smaller base than Google's; the result is Facebook's share of the mobile advertising market increasing from 17.5% to 21.7% and Google's share decreasing from 49.3% to 46.8%.

Even more, Facebook has shifted to a mobile environment faster than Google. In 2012, just 11% of Facebook's ad revenue came from mobile. In 2013, that figure was 45%. Google's mobile ad revenue in 2013 was 23.1% of total ad revenue, leaving the search giant significantly behind Facebook's shift to mobile.

All these data points seem to suggest Facebook is cashing in on Google's opportunity. But fear not, Google investors. Facebook is not a threat.

Two digital ad platforms for two different purposes
While Facebook is doing an excellent job of turning its website into an advertising behemoth, Google still dominates the entire ad market outside the walls of Facebook.

Google's ad revenue comes from two primary sources, neither of which overlap with Facebook closely: Its Google-branded sites, like Google search and YouTube, and its partner sites around the Internet that utilize Google's ad platform. These unique Google assets don't overlap closely with Facebook and its collection of social networks.

Further, the two companies are starkly different. Facebook, by definition, is a publisher that sells ads. Google, on the other hand, is an advertising network with a platform that stretches across the Internet. While the two companies' ad products will undoubtedly cross paths from time to time, and they will sometimes vie for limited marketing budgets, both companies offer unique and compelling marketing solutions that can be used simultaneously by advertisers.

Robust opportunity for Google
So, is Facebook a threat to Google based on eMarketer's data? Not at all. Sure, that could change in the future. But for now, the two companies remain uniquely different with distinctive tools for marketers.

If anything, eMarketer's data highlights how big the mobile advertising opportunity for Google really is. Not only does eMarketer estimate Google's mobile ad revenue in 2014 will grow at a magnitude more than $2 billion greater than Facebook's, but it projects a healthy 66% jump. eMarkter's confidence in Google's ability to transition to mobile is more evidence the company can successfully manage the changing environment.

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