In Social Media's 'Game of Thrones,' Facebook Stock Is the One to Back

The war for mobile ads is on, but in this 'Game of Thrones,' investors might do best betting on Facebook stock.

Jun 18, 2014 at 1:26PM

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.

One stock to rule your portfolio
Give us five minutes and we'll show how you could own the best stock for 2014. Every year, The Motley Fool's chief investment officer hand-picks one stock with outstanding potential. But it's not just any run-of-the-mill company. It's a stock perfectly positioned to cash in on one of the upcoming year's most lucrative trends. Last year his pick skyrocketed 134%. And previous top picks have gained upwards of 908%, 1,252% and 1,303% over the subsequent years! Believe me, you don't want to miss what could be his biggest winner yet! Just click here to download your free copy of "The Motley Fool's Top Stock for 2014" today.

Social is Coming Game of Thrones Infographic

Brought to you by Social Marketing Software by Marketo

Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Google (A and C class) at the time of publication. Check out Tim's web home and portfolio holdings or connect with him on Google+Tumblr, or Twitter, where he goes by @milehighfool

The Motley Fool recommends Facebook, Google (A and C shares), and Twitter. The Motley Fool owns shares of Facebook and Google (A and C class). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information