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A chart crossed my inbox this week that confirmed something I had long suspected.
Mobile device users don’t browse the internet on their phones the same way they might on their computer’s web browser. The fact is, only 14% of the time we spend on our smartphones is spent using web browsers.
Surfing the net on smartphones is dead and here’s how you can profit from the death of mobile browsing.
Don’t be confused, I’m certainly not suggesting that smartphone use is on the decline. In fact, we’re using more data and downloading more apps than ever before. What I am suggesting is that we simply don’t use our smartphone browsers very often.
In fact, we spend 86% of the time on our smartphones using individual apps.
Take a look at this chart from Business Insider.
What this chart shows is incredibly promising if you are a company that owns apps with a model for monetization.
Let’s take a look at three stocks to profit from this trend.
Zynga (NYSE:ZNGA)
Though Zynga’s IPO punished early investors, things have changed.
For starters, the stock is considerably cheaper than its IPO price, down 55% since its 2011 IPO and more than 70% since its all time high back in March 2012. We recently featured Zynga in our March Madness stock contest and the social gaming company made it all the way to the Final Four.
As we discussed in our Final Four article, the huge drop in price has attracted some major investments, including a 5% stake from high-profile investor Steven Cohen’s SAC Capital. With Zynga on track to grow revenues and reduce expenses, a turnaround seems near.
As you can see in the chart above, the Gaming category of apps accounts for 32% of the time we spend on our smartphones. And as one of the largest players in the market for gaming apps, Zynga is a natural choice for investors looking to get into this space and bet on a turnaround in the company’s fortunes.
IAC (NASDAQ:IACI)
IAC owns a diversified portfolio of more than 150 apps, webpages and products. This includes dating/casual encounter app Tinder – one of the hottest apps on the market. With no current monetization and almost one billion daily profile views, Tinder alone represents huge untapped potential for IAC.
But the company is much bigger than just Tinder.
IAC owns several well known websites and brands including Match.com, OkCupid, UrbanSpoon, Vimeo, Ask.com and About.com.
Considering that the average Tinder user spends 60 minutes per day on the app, the opportunities for profitability are huge. But when you consider the other strong brands in the IAC portfolio, this stock seems like a no brainer if you’re looking to profit from the growth of apps and the death of mobile browsing.
Facebook (NYSE:FB)
Facebook is the elephant in the room. 17% of the time we spend on smartphones is spent using the Facebook app. No single app keeps our attention more than Facebook’s.
Facebook seems to be getting better and better at monetizing its user base and social networking platform. Plus the company is investing in the future, with recent acquisitions of WhatsApp and Oculus VR. Facebook also continues to grow in popularity among older consumers and in emerging markets.
A bet against Facebook is a bet against the world’s largest social network and its hugely successful CEO and executive team. That’s not a bet I want to make.
The Bottom Line
The trend is clear. Smartphone users spend the vast majority of their time in apps, not browsing the internet. This is bad news for those making money on banner ads viewed on mobile devices but great news for the companies that will profit from the death of mobile browsing. You, too, can profit from this trend by investing in companies like those listed above.
The One Stock to Own in 2014 — The Year Mobile Takes Over
On Dec. 31, something incredible happened. For the first time in history, the majority of Internet traffic originated from NOT from PCs or desktops — but from mobile devices including smartphones and tablets. We’re never going back. Mobile is taking over. And even though the biggest player in mobile, Apple, is selling over 200 million iPhones this year alone… here at Wyatt Research, we’re recommending the one company no one is taking about. The one reaping massive profits each time a new Apple or Samsung smartphone is activated. In fact, as mobile data usage explodes in the year ahead, its stock is set to soar! Shares are already on the move. So, before this stock moves any higher, read our latest report for all the details: Click here for the full story.