Must-know: What do Google's mixed 2Q results indicate? (Part 5 of 10)
Google launches Partner Select program to expand its video business beyond YouTube
In the previous part of the series, we discussed Google’s (GOOGL) YouTube business and how it’s becoming the main driver of growth for the company. Google is now going beyond YouTube to expand its video business through the newly launched “Partner Select” program. According to Google, Partner Select is “programmatic premium video marketplace” to help publishers monetize their video content. It also helps ad agencies reach quality video content on the internet. It’s basically an interface between publishers and ad agencies for video ads.
Google facing stiff competition in video ad market
According to a report from eMarketer, YouTube generated ~$850 million in revenues from video ads in 2013. This is about 21% of the overall U.S. video ad market. Despite YouTube succeeding in monetizing its video ads, Google faces stiff competition in the overall video ad market. According to a report from Comscore and as the previous chart shows, Google sites are ranked fifth in terms of percent reaching the U.S. population.
The report also mentions that BrightRoll leads this market followed by Specific Media, LiveRail, AOL (AOL), and Google. LiveRail was acquired by Facebook (FB) earlier this month. Surprisingly, AOL is ranked higher than Google in this market because AOL acquired video ad exchange Adap.tv last year. This shows that internet players are seeing large potential in the video ad market. They’re taking the inorganic route to grow their businesses.
A few days ago, Yahoo (YHOO) acquired a video streaming platform, RayV, to provide high quality video content to users. This will help Yahoo compete with YouTube and Netflix (NFLX) in the video streaming market. Although Yahoo is trying to grow its video ad business by introducing a few original series, it will need to offer more content to become an important player in this market.
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