Last week, UBS analyst Eric Sheridan upgraded his rating on Facebook (NASDAQ:FB) from "neutral" to "buy," citing an improved profit outlook for the second half of the year. Driving this upgrade is his belief that the social media giant will further monetize its user base by expanding into more ad markets -- notably video and through Instagram. These moves should help Facebook become more competitive with Google (NASDAQ:GOOGL), which currently owns the mobile ad space.
In the video below, Fool.com contributor Doug Ehrman discusses some of the developments at both Facebook and Google, and why this nod for Facebook is so important.
Fool contributor Doug Ehrman has no position in any stocks mentioned. The Motley Fool recommends Facebook and Google. The Motley Fool owns shares of Facebook and Google. 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.