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Facebook Inc (NASDAQ:FB) Takes Safety Away From Alphabet Inc (GOOG)

Facebook Inc (NASDAQ) Mark Zuckerberg

Facebook Inc is not giving Alphabet Inc  video platform YouTube breathing space in video ads as the online video market becomes the next target for ad dollars. News from Tuesday as by ReCode has it that Facebook has started testing a new feature that that allows people to watch videos in a video hub akin to what is on offer on Google’s YouTube.

Facebook Inc zuckerberg

Before now, Facebook shows videos to users in their news feed by choosing the videos it thinks that they want to watch. Often time, users miss other videos that would interest them, and the fact that videos are shown within the news feed makes it hard to watch a series of videos on Facebook. Now, Facebook wants users to watch series of videos on its purpose-built platform. It’s a clear and direct threat to YouTube’s core selling point as the “world’s biggest video site”.

Binge-watch videos on Facebook

Will Cathcart, a VP Facebook, said that the firm has created a new videos section that “helps people discover, watch and share videos on Facebook that are relevant to them. It can be accessed by tapping a “Videos” icon at the bottom of the Facebook app”. He goes on to say that, the feature is for people that would rather watch videos alone instead of having to deal with tons of baby picture, homemade dishes, and unending musings from Aunt Sally.

All of the features that Facebook has added to its video section are designed to counter some of the features that makes YouTube the choice video platform for watching videos. To start with, you don’t have to sift between text and videos on YouTube and the new video section on Facebook puts all the videos in a single spot. The new video section lets you save videos for later, there’s a suggested video feature similar to what you have on YouTube, and a floating screen for watching videos while on other tasks.

Facebook has a motive here

Facebook has a very good enough reason to compete with Alphabet Inc – there is serious money to be made in video ads. The global online video ads space is forecast to rise by 23% to $13.8B this year and market watchers said that the video ads space would jump to $19B by 2017. More so, mobile video views have increased by 95% annually to account for 41% of all online video views in the first quarter. The market expects that mobile video views will account reach 50% by the end of this year.

Facebook already has a social home and it has a strong user base– something YouTube has clearly tried to built to compete. A video hub within Facebook is a smart move that will keep users locked on the platform and they have all the videos that they want on a spot. Facebook can copy features from YouTube to better improve its service but Google hasn’t quite yet found the secret spice for creating a vibrant user base.

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Victor Alagbe is a seasoned business and finance writer with a specialty in writing about how to invest for the long-term in healthcare, pharmacology, energy and tech stocks. His long-term focus is on stocks that provide a nice mix of growth and income. For the short term, he passionately writes about trading stock options for the excitement and leverage that stock options offer.

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