NEW YORK (TheStreet) –– As more advertising dollars move online, Facebook (FB) and its massive 1.32 billion user base continue to take share away from traditional methods. And as the social media giant gets even bigger, it could generate more advertising revenue at higher prices.
JPMorgan analyst Doug Anmuth, who rates Facebook "overweight" with a $90 price target, said he believes that Facebook has a chance to generate even higher pricing than it already has generated, as it continues to remain around 20% of overall U.S. Internet time, excluding Instagram, and WhatsApp, which Facebook announced it was buying in February for $19 billion in cash and stock.
"We believe advertiser demand for Facebook continues to build and greater ad relevancy will yield higher pricing over time," Anmuth penned in a note.
Menlo Park, Calif.-based Facebook continues to be the largest social networking platform in the U.S. and its lead is growing. In August, Facebook had 204.6 million unique visitors across all devices, according to research firm comScore. That's significantly ahead of the other social networks, including Twitter (TWTR) (121.1 million), LinkedIn (LNKD) (86.1 million) and Facebook-owned Instagram, which rounded out the list at 80.7 million impressions.
Facebook has become a mobile-first company, having generated 62% of second-quarter advertising revenue from mobile ($1.66 billion). The mobile ad market continues to grow as users increasingly access the Internet via smartphones and tablets. Research firm eMarketer noted that the U.S. mobile advertising was $9.69 billion in 2013, but it's expected to soar even higher in 2014, rising 83% year over year to $17.73 billion.
Analysts surveyed by Thomson Reuters expect Facebook to earn 40 cents a share on $3.1 billion in revenue in the third quarter.
"As ad dollars continue to migrate from traditional media channels to leading online players, we believe FB will be the greatest beneficiary, with Twitter a close second," Squali wrote in a note.