Facebook, Groupon gain more venture capitalists, spur rally

August 8
9:55 AM 2013

According to Raymond James & Associates' analyst Aaron Kessler, internet stocks' gains would continue since investors have become more confident in the new business models for mobile and community advertising.

Yelp Inc., a local-reviews site, Trula Inc., an online real-state website, and Facebook, a social networking giant, earned an average of 130% this year. In comparison, the corporations in Standard & Poor's 500 Index gained only 19%. Groupon Inc., a daily deals business, is up by 79% in 2013. In 2011, the company plummeted by 87% less than its initial public offering price due to struggles within its management and the increase in competition.

Kessler said Facebook and Yelp would gain more due to local and mobile advertising. On the other hand, the estimates compiled by Bloomberg showed that Groupon would report a 7% revenue growth since the company tried to diversify into smartphone and e-commerce offerings.

"Web 2.0 companies have been performing better than the Web 1.0 companies," Kessler stated. "More companies with social, mobile and local have been doing better recently. These are the growth drivers today."

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