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Google Inc (NASDAQ:GOOG) YouTube Might Be the Real Threat to Cable

Google inc (GOOG)

Google Inc thinks that YouTube is proving to be a fierce competition to cable TV. During the earnings call on July 16th, business officer Omid Kordestani said that YouTube is accessed by more Americans between 18 to 49 years than all cable networks combined.

Google inc (GOOG)

TVs getting threat from YouTube and streaming services

Omid believes a revolution of “the television experience for the digital age” is around the corner with surging popularity of YouTube among younger groups. With new features such as video suggestions and auto play, younger audience are finding YouTube more trendy compared to other platforms.

Omid stated that despite severe fight from Facebook, YouTube saw a sharp rise in its user metrics. The number of users visiting YouTube surged over three times year over year. Also, watch time, suggesting time spent on viewing videos, spiked 60%, which is the fastest growth rate by the firm in two years.

Omid said major traffic comes from mobile, and average time spent watching videos on mobile has more than doubled, rising to a record 40 minutes per session.

Recently, a study by Miner & Co. Studio shows that the tablets and phones are the new choices for the kids and teens rather than the television. With the growing popularity of mobiles, threat is looming large on the TVs as it is not only YouTube that they have to worry about, but more importantly, they need to face Netflix, Amazon, Hulu and other streaming services.

Facebook, a better bet for investors

Though Omid believe Google-owned YouTube is leading the race in terms of viewer count, in terms of stock Facebook is seen better than the internet firm. On Monday, S&P Capital IQ Technology Sector Head Scott Kessler in a CNBC “Squawk on the Street” interview, said investors are more confident on Google, but should focus on Facebook instead.

Considering the topline growth, Facebook is well ahead the internet firm, who is more focused on cutting cost at this point of time, Kessler said. The analyst notes, sudden upside in Google is luring investors, who are ignoring some of the risks that the internet could face.

Kessler said, for Google there is much fight in way, and growth would be interesting as, “we look out a couple of years from now and then think about what’s going on from a legal and regulatory perspective.” Kessler told CNBC that the stock is fully valued.

Kessler’s remarks come days after the search engine giant posted its results, beating analysts’ expectation. Last week, S&P Capital IQ lowered their rating on Google to Hold from Strong Buy.

On Monday, Google  shares closed down 0.97% at $692.84, and year to date the stock is up almost 30%. While Facebook, on Monday, closed up 3.10% at $97.71, and year to date, the stock is up almost 24%.

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Aman is MBA (Finance) with an experience on both marketing and Finance side. He has work as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, playing PC games and cricket.

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