Google Inc (GOOG), Netflix, Inc. (NFLX): Is Chromecast Really a Cable Killer?

Page 2 of 2

How Will Google Profit?

The Chromecast will have a large potential customer base to sell to. Device sales, however, are not the largest potential revenue source for Google Inc (NASDAQ:GOOG).

With every unit sold, Google Inc (NASDAQ:GOOG) will now have information on the viewing habits of its customers. It will know what viewers like to watch, where they watch it, and on what device. This will allow Google Inc (NASDAQ:GOOG) to do what it does best: sell specialized ad placements.

In 2012, Netflix, Inc. (NASDAQ:NFLX) released its original series House of Cards, which was produced based on viewing habits like favorite director and actors. The critically acclaimed show was a success for Netflix, Inc. (NASDAQ:NFLX), and could start a trend of a new way to produce original shows and movies. Google will have this information to sell to other producers trying to replicate Netflix, Inc. (NASDAQ:NFLX)’s success.

How the Future Looks

After being on the market for only a few days, the Chromecast is already selling out. That’s good news for Google Inc (NASDAQ:GOOG), its ad customers, and content providers hungry for viewing information. But it’s bad news for Roku and Apple Inc. (NASDAQ:AAPL). With third-party apps in development, the Chromecast will have more features to offer in the future to compete with Apple and Roku. While it won’t kill cable, the Chromecast is looking as if it will be the killer app in streaming devices.

The article Is Chromecast Really a Cable Killer? originally appeared on Fool.com and is written by Howard Cranford.

Howard Cranford has no position in any stocks mentioned. The Motley Fool recommends Apple, Google, and Netflix. The Motley Fool owns shares of Apple, Google, and Netflix. Howard is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Page 2 of 2