FACEBOOK AD PRICES DOUBLE, WILL THE STOCK ALSO? $FB $YHOO $GOOG

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FACEBOOK AD PRICES DOUBLE, WILL THE STOCK ALSO? $FB $YHOO $GOOG

Wednesday after the close, Facebook released earnings. Of the many details, the statistic that stood out was the fact that Facebook is charging 92% more per ad impression year on year.

At The Arora Report, we follow 3,000 U. S. companies and 1,000 international companies. We cannot point to any other company that has been able to raise prices by 92% year on year. What Facebook FB -0.54%  has accomplished is quite remarkable. The reason marketers are willing to pay such high prices is because Facebook has managed to change the mix shift toward news-feed ads. News-feed ads have higher engagement and better click-through rates.

Compare Facebook to Yahoo YHOO and Google GOOG. Earlier in the week when Yahoo reported earnings, the statistic that stood out like a sore thumb was that Yahoo charged less for its ads. This was a primary reason that Yahoo stock fell by about 10%. We will know how Google ad rates are faring when it reports earnings after the close Thursday. However, for the last several quarters Google cost-per-click rates have been declining.

As though the remarkable feat of being able to charge almost double was not enough, Facebook also reported that about 53% of its $2.34 billion in ad revenue came from mobile. It is worth remembering that it was not long ago mobile revenues were almost non-existent at Facebook. This comes at a time when many competitors are struggling with mobile.

From a technical perspective, in the after-hours action, the stock broke out as shown on the annotated chart.

Please click here to see the Facebook chart.

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As of this writing, the stock is trading at $63.18, far above the trendline shown on the chart…Read more at MarketWatch

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