Tomahawk, WI 10/22/2013 (BasicsMedia) – A strategic agreement has now been filed between two tech giants, Facebook Inc (NASDAQ:FB), with a market cap of $132.04 billion, and Google Inc (NASDAQ:GOOG), with a market cap of $337.97 billion. This deal got the whole industry talking and caused a lot of excitement everywhere among other tech giants. The agreement sees both companies using their combined marketing resources to help improve their revenue. I think FB really needs this deal more than Google, since the former has been in business for a much shorter time compared to the latter.

FB Remains Google’s Realistic Competitor

More importantly, is the fact that FB is the one company that is generally considered a worthy threat or competitor to Google Inc. in 2012, FB launched an advertising exchange platform but has always been adamant that Google should not participate in it. FB had introduced this tool with the intention of monetizing its ever-increasing user base. Paying advertisers were now able to get to their target customers through FB’s user base. With the coming into force of this new deal between Google and FB, the former’s advertisers can access and post ads on Facebook.

Google’s Double Click Bid Manager is marketed as a one-stop shop for all advertisers regardless of where they are on the earth. The two companies, Google and FB, depend on revenue raised from ads to stay in business. Some people may say that the two companies will now dominate the ad business, but according to me, if this is what helps them earn a lot of revenue, and turn their companies into consistently profitable ventures, I offer this agreement my full support. Moreover, other reports point out tat FB has entered into the similar deal with Amazon.com Inc.

FB Needs More of Such Deals

FB needs more of these types of deals and agreements. It ahs to stay focused in improving its financial health after the tough period it went through after launching its IPO successfully in 2012. The post-IPO period was one of the darkest moments for FB and the stock lost a lot of value, only managing to turn the situation around with its mobile ad platforms in 2013. The situation for FB would probably have been dire if not for the role played by its decision to go into the mobile ad campaign. The deals with Google and Amazon.com are the way to go.

The decision by FB to work with rival tech firms, such as Google Inc and Amazon.com Inc, is a welcome one. This shows that FB has come of age and is now prepared to co-opt its rivals in order to improve its own financial health. In the past, FB has been focused on earning revenue from advertisers within its own user base, forgetting that the potential outside its user base is huge. This two-pronged approach is one with the capacity to totally change FB’s fortunes where financial matters are concerned and ensure that it spreads its revenue sources everywhere.

FB’s potential is about to be realized in full, once the deals with Google and Amazon start bearing fruit. I expect its next quarter financial results to be better than those it has announced up to this point. I recommend FB to investors interested in tech stocks.

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