Facebook’s $16 billion acquisition of globally-popular messaging service WhatsApp (which may end up being $19 billion down the road) has shaken up the tech world. But, should Google be the tech giant shaking the most?
In some ways, Facebook’s future may be written in Google’s past. Google morphed from a search engine into one of the world’s largest technology companies, offering a diverse suite of products including software, email, and content aggregation. Likewise, Facebook started as a narrowly-defined website – a social network for college students – but is now branching out as it acquires other companies.
CNBC contributor Gina Sanchez, founder of Chantico Global, says Facebook’s acquisition of WhatsApp and its 450 million users – particularly overseas – is a long-term challenge of Google’s dominance.
“One of the things it does is it opens up the global market which is a place where Facebook really hasn't had a big presence,” says Sanchez. “It keeps the sort of teens and tweens engaged to sort of graduate them up to Facebook. So, I do think this is hugely important.”
“I think Facebook is mounting a serious campaign against Google and it can't be ignored.”
Investors thinking now would be a good time to short Google could get burned as they would have over the past several years, according to CNBC contributor Andrew Busch, editor and publisher of The Busch Update.
Busch sees the technicals on Google’s stock as saying anything except sell. Google’s 10-day moving average is still above its 30-day moving average; in a moving average crossover trading strategy, that would at indicate a buy signal or, at the very least, not indicate a sell signal. But, if that changes, Busch sees a significant downside ahead.
“A big price gap… occurred between $925 and $975,” says Busch of Google’s price jump in mid-October. “Typically, when you have that big of a price gap, it will eventually go back and fill it. So, I'm looking for a reason to sell Google. I'm going to use the 10-day going through the 30-day but we're still a long ways away from that.”
To see the full discussion on Facebook and Google with Sanchez on the fundamentals and Busch on the charts, watch the video above.