Facebook Inc (FB)’s Video Strategy Is Worth $16 Billion

What about Google?

Google Inc (NASDAQ:GOOG) is a bit of a mixed bag. For example, some of its web properties are extremely well suited to monetizing mobile. For instance, YouTube doesn’t suffer from the transition to mobile as I watch ads just fine on my Samsung Galaxy device.

Google+ may have some issues, though. Google Inc (NASDAQ:GOOG)’s social network comes as an extension to a Gmail or YouTube account. The total number of active users on Google+ is 20% of total users, but how Google arrived at that statistic is pretty questionable at best.

However, it does highlight something interesting about the web–we’re starting to see grand central stations. You can use a Google log in for a certain ecosystem of web applications. Likewise, you can use Facebook as a proxy for a user account on many websites.

Even so, I see more Facebook users blogging away on their social status feeds than on Google+. Therefore, the transition to mobile could hurt Google more than it could hurt Facebook. This is because Google has an advertising network called AdSense that allows for the average advertiser to advertise across a network of websites that display ads on behalf of Google. Demand and prices for display-based advertisements are expected to fall. This is because banner advertisements don’t show up on mobile browsers. Because of this, a large component of Google’s display-driven advertising will be negatively impacted.

On the upside, YouTube, Search-based advertisements, and app store sales will continue to trend higher.

Conclusion

I think that search-based advertising will continue to thrive. However, the effectiveness of a click-through is limited, as a consumer will have difficulty making a purchase over a mobile browser.

Therefore, mobile advertising will center on short 15 second clips. Assuming that’s the case, YouTube, Facebook, and Tumblr may have effective solutions for marketers going forward. Banner ads won’t die, but they will be cheaper to buy going forward.

The article Facebook’s Video Strategy Is Worth $16 Billion originally appeared on Fool.com and is written by Alexander Cho.

Alexander Cho has no position in any stocks mentioned. The Motley Fool recommends Facebook, Google, and Yahoo!. The Motley Fool owns shares of Facebook and Google. Alexander is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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