The document analyzes whether Facebook can become the next Google in terms of financial performance. It finds that while Facebook has been growing in revenue, it remains far behind Google's quarterly revenue and profits. Google generated over 7 times more revenue and over 40 times more net income than Facebook in the last quarter of 2012. For Facebook to narrow the gap with Google, it will need to continue growing its user base and find ways to more efficiently generate ad revenue from existing users.

1. IS FACEBOOK
THE NEXT
GOOGLE?
A financial analysis
Feb. 8, 2013

2. IS FB THE NEXT GOOG?
• Since going public, Facebook has remained in the spotlight
when it comes to their financials
• Many analysts have hypothesized if Facebook could become the
next Google, implying soaring revenues and profits
• Now that FB has been public for almost a year, we thought we’d
see how their financials stack up...

3. QUARTERLY REVENUE
$16,000.00
$14,000.00
$12,000.00
$10,000.00
FB Revenue
$8,000.00
Goog Revenue
$6,000.00
$4,000.00
$2,000.00
$-
2011-12 2012-03 2012-06 2012-09 2012-12
Data Source: MorningStar.com

4. REVENUE LONGSHOT
• Although it appears to be slowly increasing, Facebook remains
far behind Google when it comes to quarterly revenue
• Google generated 734% more revenue in Q4 than Facebook
But what about profits…

5. PROFITS
$3,000.00
$2,500.00
$2,000.00
$1,500.00 FB Net income
Goog Net Income
$1,000.00
$500.00
$-
2011-12 2012-03 2012-06 2012-09 2012-12
$(500.00)
Data Source: MorningStar.com

6. PROFIT IS ALSO GREATLY
UNBALANCED
• From a profitability perspective, the companies are further apart
• Google generated 4409% more net income than Facbeook in Q4
Image source: http://updates.clltopics.org/2273-site-news-june-19th-workshop-columbia-maryland

7. IN SUMMARY
• Despite being similar in size (visitors, impressions) Facebook is
unable to come close to Google in terms of revenue or profit
• Revenue: Google $13.2B – Facebook $1.6B
• Net Income: Google $2.9B – Facebook $64mm
• To narrow the gap they will have to continue adding users, but
more importantly find out how to more efficiently advertise to
their existing users
• Facebook Exchange could be a step in the right
direction, but we’ll see how much volume it can generate