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Cramer: Facebook 'dramatically cheaper' than rival

Friday, 3 Jan 2014 | 10:45 AM ET
Cramer: Why Facebook remains cheaper than chief rival
Friday, 3 Jan 2014 | 9:38 AM ET
Investors should follow advertising money in their pursuit of social media stocks, CNBC's Jim Cramer said Friday.

In the social media sector, investors need to follow the advertisers, and right now, advertisers love Facebook's native platforms, CNBC's Jim Cramer said Friday.

"Why are people so skeptical?" Cramer said on "Squawk on the Street." "Is it because Facebook did so poorly after it became public? Because the last couple conference calls, they have been masterful."

Facebook's troubled initial public offering in May 2012 hurt the stock in its first several months as a public company. The social media network picked up steam in the past year, gaining nearly 100 percent and reaching a high of $58.58 per share this past Christmas Eve.

(Read more: Cramer: Your best plays for 2014)

"Facebook is real, and look I'm not saying Twitter is not," Cramer said. "I'm saying Facebook is dramatically cheaper than Twitter."

(Read more: Smokestacks—a vision of profits: Cramer)

Native advertising, or advertising geared to a specific online platform or users' experiences such as branded content or viral Web videos, draws brands to Facebook, Cramer said. He emphasized the trend of pizza delivery companies reaching customers directly through Facebook.

Disclosure: Cramer's charitable trust does not own shares of Facebook or Twitter.

—By CNBC's Jeff Morganteen. Follow him on Twitter at @jmorganteen and get the latest stories from "Squawk on the Street." Reuters contributed to this report.

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