Google Inc , shares are up strongly in pre-market trading on Wednesday morning in the wake of an upgrade from Goldman Sachs. The Wall Street bank said that earnings would rise in future on the back of Google’s video efforts, and the increasing chance of the firm doing well on mobile. Goldman put a price target of $800 on the firm’s shares and rated them at “Conviction Buy.”
Video has been one of the most important stories at Google in recent years, even as the firm has given up ground to services that focus on one particular thing rather than a plethora of online video. Netflix, Inc. has become the source for premium content on the web, and Amazon.com Inc. owned Twitch is the de-facto home of live-streaming for games. Google is fighting back.
Google launched YouTube Gaming
For those not used to the idea, video game live streaming sounds absurd. It is, however, one of the most popular forms of video on the Google , site, and one of the center pieces of its push to original content.
The likes of PewDiePie and other majors streamers are some of the biggest stars that have launched themselves in the internet era. In recent years Twitch, a platform that allows users to stream their games live, has become more and more popular. Amazon bought the service for just less than $1B last year.
Google is pushing back, and its push into video segments that it lost in the past is one of the reasons Goldman Sachs thinks that YouTube is a goldmine for those with shares. YouTube Gaming, the app that will compete on a direct front with Twitch, is set to launch today.
Google says that the new service is a “live platform that will benefit all of YouTube.” YouTube head of gaming Ryan Wyatt says it’s a “one-stop shop for all gaming content,” but it could grow into so much more.
“I can picture sports, beauty tutorials, live cooking streams,” he told the BBC on Wednesday morning.
Google value explodes
Goldman Sachs is bullish on Google because of the firm’s chance to grow YouTube despite the hurdles that stand in its way. Video content has become the hallmark of growth firms in recent years.
Amazon, Facebook, Twitter and Netflix are all leaders in their own way and Google needs to protect its ground as well as growing into areas now controlled by those platforms.
Right now that means gaming, but Google has toyed with the idea of a premium YouTube service that will house paid-for content that will compete with Netflix.
In the last three months Google , , despite the chaos across the market, has increased in value by more than 10 percent. Goldman, in this morning’s report raised its price target from $660 to $800. That’s above the sell side median, which sits at $765, but below the high on Wall Street which comes in at $900.
At time of writing shares in Google were selling for $636.88, up 3.99 percent for the morning so far.