With Facebook due to release its earnings in ad revenue in a few days, the numbers will provide a clear indication as to whether Google continues to win in this area of revenue or, in fact, Facebook is also a contender to its throne.
What makes these results important is because of Facebook making its initial public offering in May and which will indicate whether it is growing fast enough to justify a high valuation made during the time of the IPO.
Debra Aho Williamson, an analyst with the market research firm eMarketer, explains why these results are so important, in saying, “Advertisers need more proof that actual advertising on Facebook offers a return on investment. There is such disagreement over whether Facebook is the next big thing on the Internet or whether it’s going to fail miserably.”
However, what Facebook has to its advantage is personal data of almost 900 million users but using it effectively provides effective and profitable ads – a task that is anything but easy. Google, on the other hand, being in the game much longer already creates 10 times the annual revenue from advertising that Facebook generates.
And so in order to get this task right, Facebook has hired the services Gokul Rajaram, who ran the AdSense engine, when it acquired his company, Chai Labs, and which specializes in building artificial-intelligence algorithms that analyzes online data.
Yet it isn’t going to be easy – since another challenge to reach mobile users with Facebook advertisements is also on the company’s list of things to do apart from having to cope with a lack of growth number of new users in the United States and little or no ad profits when it comes to Indian and Brazilian users.