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Facebook Vs. Google: What Morgan Stanley Learned And What's Next

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Facebook Vs. Google: What Morgan Stanley Learned And What's Next
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In a report published Tuesday, analysts at Morgan Stanley summarized the Q1 results posted by Facebook Inc (NASDAQ: FB) and Google Inc (NASDAQ: GOOG) (NASDAQ: GOOGL).

Both companies posted higher than expected top-line numbers. Facebook's advertising numbers beat the analysts' estimates. The company added 46 million new daily active users during the quarter. Many of these were monthly users who have converted to being daily users. The analysts believe that the company is monetizing this conversion well.

In fact, Facebook has witnessed acceleration in new daily active users in three of its four regions across the world. The company has been spending more advertising dollars to grow its user base, which appears to be bearing fruit.

Related Link: Will The Google Partnership Boost Twitter Meaningfully?

According to Morgan Stanley, Google's outperformance was driven by Google Websites, specifically YouTube. This is one segment that appears to be accelerating at an appreciable pace. However, overall growth, on a constant currency basis, appears to be decelerating in the company's mature markets of the U.S. and UK.

The analysts believe that investors are currently underappreciating the extent to which search is slowing. There is limited upside to the search estimates for Google, according to the analysts.

In addition, the analysts expect a lack of growth in U.S. advertising through 2015, which would impact both companies.

Latest Ratings for FB

DateFirmActionFromTo
Aug 2017SunTrust Robinson HumphreyInitiates Coverage OnBuy
Aug 2017MizuhoReinstatesBuy
Jul 2017Pivotal ResearchDowngradesHoldSell

View More Analyst Ratings for FB
View the Latest Analyst Ratings

Posted-In: Morgan StanleyAnalyst Color Analyst Ratings Tech Trading Ideas Best of Benzinga

 

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