The stocks of both companies soared on very positive results, with Alphabet briefly surpassing Apple (AAPL) as the largest company in the world, as measured by market capitalization.
In both cases, the primary driver for earnings was growth in advertising.
Three days after the Facebook release, LinkedIn (LNKD) announced its earnings, and the stock immediately feel by a stunning 44%.
What's most interesting to note about the LinkedIn experience is that the company's revenue and earnings were in line with what the company had steered analysts toward, but the unexpected decrease in the guidance of growth expectations for this year caught analysts off guard. This was principally due to slowing corporate sales.
This slowing growth in users was somewhat similar to the experience of Twitter (TWTR), which announced its earnings six days after LinkedIn. Twitter's stock price, however, has risen 25% since that report. (Facebook, Alphabet, Google and Twitter are part of TheStreet's Action Alerts PLUS portfolio.)
The business models of all four companies are different. Facebook, Alphabet and Twitter rely principally on advertising revenue, while LinkedIn is mostly on subscription and professional services to recruiters and human resources departments. But they are not so far apart that investors, especially in Facebook and Alphabet, should disregard the most recent stock price experience of LinkedIn.
LinkedIn's recent reduction in forward guidance may even be a harbinger of what is coming for Facebook and Alphabet.
LinkedIn's user base and corporate clients are either actively or passively engaged in business and the economy, and open to being approached by others on the site for that purpose.
The users of the services offered by Facebook, Google and Twitter come from a broader spectrum of society, less engaged in business and less interested in being approached via advertisements from the corporate clients of these companies.
This disinterest has been expressed by the increasing use of ad blockers by Facebook, Twitter and Google users, as discussed in The 2015 Ad Blocking Report by PageFair Limited last August.
Even as the use of ad blocking is increasing, Facebook and Alphabet appear to have been able, so far, to mitigate its impact by increasing their share of advertising expenditures from companies, which are increasingly shifting to online advertising and away from traditional print, radio and television.
That is not a perpetual well from which to draw revenue; it is also a depleting resource.
The decrease in the rate of corporate clients interested in using the LinkedIn services for hiring and recruiting may be an indication of a shift toward cost cutting in the middle and higher echelons of labor costs.
The broad-based reductions in corporate revenue growth I discussed in the column, "Female Consumers Keep Us From Recession," indicate this is probable.
It logically also implies that broad-based reductions in advertising spending, including those offered by Facebook, Google and others, is imminent as well.
Consumer demand is either there or it isn't, and if it isn't, advertising isn't going to create it. As such, cutting back on advertising of any kind is prudent, until demand returns.
Unless demand increases soon, it is probable that many companies will simply decide to slash advertising budgets until it appears demand has returned.
Although Facebook and Google have been able to grow their advertising revenue at the expense of the traditional media, so far they are facing the same shrinking consumer demand environment at the same time they are also facing the increased use of ad blocking.
As these trends continue to play out, the prospects for them both to announce a "surprise" reduction in expected growth rates increase, as do the prospects for their stock prices to suffer the same fate as LinkedIn's last month.