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Google Inc (GOOGL)’s 45% Fees are Facebook Inc (FB)’s Entry Ticket Into Content

Google Inc (NASDAQ:GOOGL)‘s troubles are far from over, but in fact are exacerbating as its biggest rival in online advertisement, Facebook Inc (NASDAQ:FB) gears up to battle the tech giant in the content arena. In an interview on CNBC, Mark  Spoonauer, Tom’s Guide Editor-in-Chief, explained how facebook is enticing star’s from Google Inc (NASDAQ:GOOGL)’s YouTube.

Google Inc (GOOG)

“[…] YouTube, even though they really help out with the distribution and all the back end stuff, they take a hefty 45% chunk out of that revenue, so these stars are looking for alternate streams of distribution, which includes the like of Facebook Inc (NASDAQ:FB) and upstarts like Vessel […],” informed Spoonauer.

Google Inc (NASDAQ:GOOGL) CEO, Larry Page’s, second threat, Vessel, which is a video start-up is aiming to bag at least 100 of the top 200 stars on YouTube, according to Spoonauer. Hulu’s founder is behind this new platform, which gives it even more credibility, and hence resulting in the ringing of alarm bells for Google.

Of the two, Facebook Inc (NASDAQ:FB) is potentially more dangerous in terms of snatching advertisement dollars from YouTube. This is because of two reasons. Firstly, facebook gives the content what Spoonauer called the ‘discoverability factor’, which makes the new content more easily discoverable through newsfeed. Secondly, Google Inc (NASDAQ:GOOGL)’s video platform is much more of a passive experience than facebook, where friends can exchange comments about a video, as opposed to a more general audience on YouTube.

“[…] Over time I think that Facebook Inc (NASDAQ:FB) is the biggest threat because just on face value. It is more viral, people who are engaging with those things, it is just a more engaging platform, and I think that people are using those things more often because how many times a day we check facebook, as opposed to YouTube […],” said Spoonauer.


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