Outsell 200Investors cheered Facebook’s and Google’s results, the first with a standing ovation (shares up 14%) and the second enthusiastically (shares up 2%+). There was lots of good news for both companies, as overall revenues and profits continued to climb. Google’s fourth-quarter revenues were up 17%, YOY, to $16.86 billion, while its net operating income jumped 14% to $3.92 billion. Facebook’s revenues were up 63% to $2.59 billion, while profit soared eight-fold to $523 million.

The prospect of a Google/Facebook duopoly is a daunting one writes Ken Doctor, Affiliate Analyst of Outsell in his latest Outsell Insight:

“It is built on two big factors: engagement and data.  Who are leading companies in engagement, in the US and worldwide?  Google and Facebook each can claim about 10% of Internet usage, giving each five-plus hours per months. How they mine users’ interaction with that time, though, is the gold. While much attention has been paid to Google’s relentless building of its ad stack through acquisition (see Insights, June 14, 2012, Google’s March to Singularity, Facebook’s rise in advertising share is less followed. In short, its innovation is all in building wide and deep profiles, combining its knowledge of Facebook interaction with traditional data bought from companies like Acxiom, Alliance Data Systems, and Datalogix.  The result: narrow slices of targetable customers for big brand advertisers. It’s advertising that buyers increasingly believe is trackably effective.  Given its scale — and the fact that its inventory may total 25% of all the digital ad space globally — it can price its products to sell.  The numbers show that it has and is winning favor.”

Source: Outsell Insight