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Facebook's Election Day Pitch

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In a presidential election that's now marked by far more competition in social networking and the proliferation of Internet usage on Apple (NASDAQ:AAPL) iPhone and Google (NASDAQ:GOOG) -Android powered devices, Facebook still has a lot yet to prove to investors. Meanwhile, shares remain roughly half their IPO price from March.

Still, as the company rolls out its election day social media pitch that connects users to real-time voting trends in their network and throughout the US, investors may be underestimating the impact of the 2012 elections.

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In September, TheStreet noted that political election year ad spending may be one of the biggest positive surprises for the earnings of publicly traded media companies through 2012.

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 (NYSE: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 and Yahoo (NASDAQ:YHOO), as well as broadcast giants like Time Warner (NYSE:TWX), CBS (NYS:CBS), and Disney (NYSE: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. He sees up to $5 billion in overall presidential and congressional ad spending this election season with roughly 10% allocated to the Web.

To be seen is whether campaign ad spending and Facebook's election day efforts can impress investors or tie into mobile efforts. In using Facebook's iPhone app on Tuesday, there's little sign of any Election Day traffic and the buttons and sites that can be accessed on desktops don't immediately appear. Meanwhile, Twitter is ablaze with political handicapping and speculation.

President Obama and Republican candidate Mitt Romney have profiles on both networks with millions of followers respectively.

While Facebook CEO Zuckerberg and COO Sheryl Sandberg were able to impress investors with how third quarter mobile results tied into the company's overall outlook, watch for the presidential election to give new data and talking points for the social network in fourth-quarter earnings.

Voters won't only be choosing between Democrats, Republicans, and Independents - they'll also be choosing between social networks.

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