It's a fair charge, based on reported numbers. But if you're buying tomorrow, it's an unfair charge. And I think you buy stocks based on tomorrow, not yesterday.
Facebook is in the process of rolling out Facebook Gifts, which will combine data on friends with gift suggestions and commerce. It's also rolling out sponsored results, a mobile ad network, and app install ads (developers pay to add "install now" ads into a mobile news feed) as it tries to justify its valuation with a mobile strategy.
It's part of a general industry transition, away from a Web-first development system to a mobile-first one. The new strategy will be a feature of today's conference call following its quarterly earnings announcement, which is expected to follow poor numbers on the failure of Zynga (NASDAQ:ZNGA). What analysts will be looking at is the top-line - acceleration is considered a must.
I have said this before about Facebook but I will repeat it. I wouldn't consider buying the stock until all lock-ups are expired in January, and I would base my decision then on the results coming up for the quarter ending in December. I am looking for a fall in the stock's price from the current $19.30 to about $13/share, as venture capitalists who got in for nearly nothing get out with what they can.
Google's strategy is more advanced but more open to criticism. Its Android operating system has replaced Windows as the alternative to Apple. But the company is still losing money on its Motorola acquisition, and is being beaten in its own marketplace by Samsung (OTC:SSNLF) and Amazon.com (NASDAQ:AMZN).
At some point, analysts feel, Google has to turn its platform advantage into a financial one. Analysts are anxiously awaiting its October 29 Nexus unveiling. It's now evident, from the Amazon success with the Kindle Fire, that if Google can't deliver competition with Android products it won't retain control of the Android ecosystem.
Beyond devices, Google needs to speed up adoption of its Google Wallet, into which users pour their credit and debit cards for online and offline shopping. That, and Google Play, are how the company plans to monetize its advantages, and investors want to see results this Christmas. Which, by the way, Google says will be stellar.
I currently have about 20 shares of Google, acquired when they were below $500, and I am untroubled by its recent fall, which I take to be more in the line of a correction than anything truly worrisome. But failure in mobility and e-commerce could make me rethink my position, so this is a big Christmas for the stock.
Disclosure: I am long GOOG. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.