With social media now firmly in the business of selling political ads, one of the more intriguing contests of this election cycle may be whether record ad spending helps to reinforce the business models social networks like Facebook, Pandora (P) and Twitter.
It's the first election season during which social media giants are making their pitch for a bigger share of the political dollars that typically go to established Web players like Google (GOOG) and Yahoo! (YHOO), as well as broadcast giants like Time Warner (TWX), CBS (CBS) and Disney (DIS).
Some analysts expect ad spending this election cycle to add meaningful third- and fourth-quarter revenue for Facebook and Pandora. Arguably even more important than a prospective earnings boost will be whether the social media giants prove their respective business models work in generating ad dollars as investors demand a clearer picture on platform monetization.
Michael Pachter, a managing director of research at Wedbush Securities, gave
TheStreet a back of the envelope calculation that social networks may see an
election cycle revenue boost of more than $100 million in the second half of 2012.
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