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Facebook Inc (NADAQ:FB) Video Weakens as Snapchat Catches Mobile

Facebook Inc, Netflix Inc are still a buy despite market

Facebook Inc  is the king of social networks. The firm has outpaced Twitter Inc on almost every single front, and it keeps growing in its core app, its Instagram image network and its Messaging apps. On that last front the firm faces a problem, however, and it could change the way the firm approaches competition from here on out.

Facebook Inc, Netflix Inc are still a buy despite market

Snapchat, the messaging platform that Facebook once tried to buy, says that it shows 4 billion videos per day. That’s the same number as Facebook, though with a much smaller user base. Growth is the real story in the firm’s video stats, however. It crossed 3B video views per day just over a month ago, and crossed 2B views in May.

Facebook video cools down

Facebook video efforts have seen very quick growth in the last year, and the firm seems to be looking to slap ads on those videos in order to garner additional revenue and cut into Youtube’s dominance of the online video ad market.

Snapchat has gotten there first. The firm set up its “Live Stories” feature this year. It allows users to tune in to specific events. In the midst of those events, like last weekend’s VMA awards, ads are played and Snapchat gets paid. The fact that the firm is sure of the source of its video, something Facebook has a problem with right now, makes it appeal much more to those buying ads.

Snapchat has at least 100M daily users, about a tenth of the 1B that Facebook boasted last week. Facebook’s video views are prominent on desktop, where Snapchat doesn’t even have a presence. On mobile the messaging service appears to be second only to Youtube, or perhaps bigger than it.

Facebook struggles with video ads

Snapchat didn’t make a profit in 2014 and because the firm is private we can’t get a clear picture of how much money the firm’s video ads are bringing in. We can be sure, however, that Facebook  still hasn’t figured out most of the problems in the segment, and the firm still can’t compete with YouTube for ad dollars.

Facebook has faced a lot of issues with video ownership in 2015 as it tries to push its video platform to massive growth. Content creators have argued that Facebook’s system pushes users to copy videos from their source, and doesn’t represent viewing stats in a realistic way.

Facebook is going to add an automatic system to police copied video, but it will rely on owners making claims about the source of their work. That’s a start, but in order to capture the ad market, the firm will have to attract the kind of content that Youtube has preened over the last decade.

In the meantime Snapchat, the social network of choice for many younger people, is waiting in the wings. Anthony Pompliano, a product manager at Facebook, moved to Snapchat earlier this month in order to drive the firm’s growth ambition. On mobile at least that growth will rely on keeping Facebook at bay in the video market.

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