Right now, there's is no "king" of social media. And yet the competition is only just beginning. The rise of smartphones and tablets as useful tools for connecting with friends, colleagues, and the world around us has amplified the importance of Facebook (NASDAQ: FB ) , Google's (NASDAQ: GOOGL ) (NASDAQ: GOOG ) Google+, and Twitter (NYSE: TWTR ) .
Think of the battle as akin to Game of Thrones. Below I've included an infographic that illustrates this truism visually. In the meantime, let's talk about what this battle means for you, as an investor, and why Facebook stock is already angling to win the throne.
The mobile advertising market = Westeros
For those unfamiliar, HBO's Game of Thrones is an adaptation of a series of books by author George R.R. Martin in which royal "houses" compete to rule Westeros, a vast land of fiefdoms united under one king seated on the Iron Throne. Sunday's season 4 finale drew an estimated 7.09 million live viewers, and likely much more than that in DVR and on-demand showings.
In social media, the competition isn't between the Lannisters, Starks, and Targaryens but between Facebook, Google, and Twitter. Not surprisingly, eMarketer names these three network operators as the market leaders in the still-fertile field of mobile advertising, though one stands taller than the others. Google, with a long history of delivering ads to users, controlled just under half the market in 2013. Facebook accounted for 17.5% of mobile ad spending over the same period, while Twitter served just 2.4% of the market.
Daunting numbers, to be sure. Yet don't think this competition is over. Google's share is expected to fall again this year as both Facebook and Twitter report modest gains. Meanwhile, the overall market is on track to grow by more than 39% annually between 2013 and 2018, when eMarketer says companies will spend nearly $95 billion worldwide on mobile Internet ads.
Two great houses and one well-heeled upstart
So who wins this Game of Thrones? Ultimately, I think it's too early to tell. Google knows your secrets. Facebook is flush with cash and an enterprising spirit. Twitter is relentless. And everyone else is on the outskirts, waiting to pledge their house to a winner. Here's a look at the advantages of the major players as growth explodes over the next five years:
- Facebook: Already the world's largest social network with more than 1.2 billion users. Plus, 59% of revenue is now sourced from mobile devices. Aiding the company's efforts are the popular photo sharing service Instagram and messaging powerhouse WhatsApp, which Facebook acquired for $19 billion in February.
- Google: Android is still king among mobile operating systems while Google+ touches every one of the company's apps and offers users a well-liked alternative to Facebook. Meanwhile, Hangouts have come to set the network apart as video takes on a greater role in mobile communications.
- Twitter: Although a minor house in this competition, Twitter has big allies in the world of TV and entertainment. Clever mechanisms for connecting directly to live content has made the network a must-visit during prime time for a growing number of users.
If I had to choose one from among these three I'd choose Facebook stock, if only because it benefits from three major sources of engagement in its primary platform, Instagram, and WhatsApp, with each one growing fast. Do you agree? Have a look at the graphic below and then leave a comment with your predictions for who will win social media's 'game of thrones,' and why.
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