Sunday, 6 November 2016

Disruption in two charts

Traditional industries are being disrupted faster than ever. Google disrupted newspaper ads now Facebook is adding to their pain. Valuations of newspapers are cheap for a reason at the time of IPO both Google and Facebook looked expensive but valuations aren't as important when there is a paradigm shift of a better mouse trap.

Not only have Google and Facebook disrupted hundreds of newspapers they have also taken all the growth leaving advertisers with little digital choice. Digital Content Next have calculated that the two companies accounted for all the growth in US digital advertising in the first half of this year. The rest including Yahoo are shrinking. If you're worried about their dominance it might be an idea to go long their shares.

Decisive has a long position in Facebook and Google. The material in this article is for informational purposes only and in no way constitutes a solicitation of business or investment advice. The material has been prepared without regard to any client's or other person's investment objectives. Before making an investment decision you should consider the assistance of a financial adviser and whether any investment or service is appropriate in light of your particular investment needs.