New Advertising Initiative Is Great News for Facebook Stock
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BUZ INVESTORS Facebook TV Can Push FB Stock Facebook Inc (NASDAQ:(FB) is a rare gem in the technology world. Its brilliant “economic moat” has its competitors losing sleep. It’s fascinating how CEO Mark Zuckerberg’s peculiar ways of doing business are continuing to bolster this moat.
Zuckerberg has undertaken another big initiative which hints at further upside potential for FB stock. It could be great folly to not call Facebook stock the best technology stock in 2017.
It’s not a physical TV (although we might eventually see one; after all, Facebook is already making technology hardware); it’s a television-like entertainment streaming service.
Facebook TV is a Game Changer for FB Stock
A television streaming service may sound like an odd project for a technology company but, when you see an e-commerce company (Amazon.com, Inc. (NASDAQ:(AMZN)) and an online search engine company (Google, which is owned by Alphabet Inc (NASDAQ:(GOOG)) making money off streaming, the pieces start falling into place.
Facebook TV Can Push FB Stock
You see, for its revenue base to keep growing, Facebook must keep adding new features to its platforms, even if that means blatantly copying peers. And Zuckerberg is not too shy to admit that this is exactly what he’s doing now.
No, I’m not talking about Facebook’s attempts at cloning archrival Snap Inc. (NYSE:(SNAP). That is history, not news. I’m talking about Facebook’s latest bid to imitate the big daddies of the tech world, Amazon and Alphabet.
Now Facebook’s plan is to stream two-tiered video content, which will be created by third parties but will mostly be owned by Facebook. In turn, Facebook will split the advertising revenue with the creators.
Here’s what the two tiers will look like.
- 20- to 30-minute webisodes that will be owned by Facebook.
- 5- to 10-minute videos, that may or may not be owned by Facebook.
Both kinds of videos will be running advertisements. (Source: “Exclusive: Facebook signs BuzzFeed, Vox, others for original video shows – sources”, Reuters, May 24, 2017.)
Bottom Line on Facebook Stock
My friends, the reality is that people are giving more screen time to their smartphones today than they are to their television sets. Facebook has realized that there’s a lot of money to be made off this trend. Also, it’s easier for the company to pull it off because Facebook has the unique edge of having roughly two billion members of the world’s population already on its platform.