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Facebook's Election Day Pitch

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As Americans cast their votes in Tuesday's presidential election, Facebook (NASDAQ:FB) sits in a position of being a social networking industry veteran after playing a key role in grassroots efforts during the 2008 campaign. Still, for Facebook's investors, the presidential election may turn out to be a referendum on company's earnings prospects, as it bids to increase its relevance in a social media landscape marked by the rise of Twitter.

A quick visit to Facebook shows that as polling stations open for the 2012 presidential vote and scores of Senate and Congressional campaigns, the company is taking this year's election very seriously.

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At the top of the billion-member-plus social network is a button that allows users to find their polling stations and show friends and family they are voting. "It's Election Day," Facebook.com reads. "Tell friends you're voting in the 2012 election and find out where to vote," the button goes on to add.

Already as of the early afternoon, Facebook users can see who in their network has said they've voted... and impute who hasn't.

Meanwhile, Facebook has launched a separate Facebook Stories site to track voting in real time. As of early morning, the site has over 160,000 likes connecting back to its flagship network. What remains to be seen is how the site's data will play into Election Day coverage once polling stations close.

While election year buttons and dedicated sites may be about trying to deliver on chief executive and co-founder Mark Zuckerberg's get-out-the-vote mission, there's also real money to be made. The 2012 presidential horse race comes at a crucial time for Facebook as it tries to prove to advertisers and investors that its platform can work in an increasingly targeted and mobile media world.

When the the 2012 presidential race ends, tech investors and analysts are likely to closely scrutinize how Facebook and Twitter perform on user traffic, advertising revenue, and mobile usage. Results are likely to be a key gauge for investors as they handicap who will be the winners and losers in the social networking space in coming quarters and years.

Since late October, Facebook is riding a wave of revived optimism on the company's shares and earnings outlook after its first months as a public company were mired by falling share prices and concerns of slowing growth and user interest.

The company's shares surged over 20% after reporting third-quarter earnings that showed Zuckerberg & Co. were making progress on mobile efforts and the network's overall usage increased.

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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