MIZUHO SECURITIES USA INC. | US EQUITY RESEARCH
Big 3 Platforms Remain Dominant; Improvements From Yelp, Pinterest and LinkedIn
In May 2016, we conducted our third mobile survey of U.S. smartphone users, and came away with some interesting takeaways: 1) Google continues to dominate mobile search but we saw an improvement with people going to Yelp for local info; 2) other social apps like Pinterest and LinkedIn also saw an increase in people using those apps, and are well ahead of Twitter; and 3) Amazon's lead in mobile shopping continues to widen. We remain bullish on GOOGL, FB, and AMZN based on our third survey results.
Overall smartphone usage – In general, we found that the vast majority of people still use Google to find information (~80%) – whether it is through a Google search app, directly in a browser (Chrome or Safari), or via Google Now voice search. Facebook Messenger is the most popular way people communicate on their phones (after texting and calling), and Yelp also saw strong improvement in local search - 29% of users now use Yelp to find a local restaurant or store, up from 23% in November 2015.
Social Media – In general, it appears more people are utilizing social media apps, with Facebook remaining the leading social site by a wide margin. When we asked which social apps people are using and would continue to use the most, Pinterest came in second at 35% (up 6 points from November), and LinkedIn came in third at 33% (+4 points). Twitter also increased 3 points but didn't make the top 4 social sites that people use.
mCommerce – 67% of people now shop on Amazon's mobile app, up from 61% just six months ago. Perhaps more importantly, the average spend on Amazon has increased by ~20% and is now more than 4 times more than runner-up eBay. We believe that Amazon's Prime flywheels are in full effect - as Prime users not only grow in users, but increase their engagement and purchase volume.
We Remain Buyers of GOOGL, FB, and AMZN shares. With our recent survey results, which highlight the commanding dominance of these three companies on mobile, we have greater conviction that these stocks will generate solid returns through 2016.
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