Facebook (FB) stock has been roaring higher for the last year, jumping 34% as it continues to improve monetization and dominate mobile. Google (GOOGL, GOOG) stock, meanwhile, has underperformed the wider market and lost 7% over the last year.
Considering the lightning-fast pace at which Facebook has been moving on a number of core initiatives — most notably Instagram, Oculus, and video — and the leisurely pace at which GOOG has responded to FB’s video assault specifically, I don’t think the folks in Mountain View are taking Zuckerberg & Co. seriously.
Big mistake. The New York Times reported today that FB is trying to hammer out licensing deals with record labels in an effort to bring music videos to Facebook’s website.
Google’s YouTube is currently the largest web platform for music videos by a longshot…but if GOOG reacts to this with complacence, then mark my words: Facebook will be the default online video platform within three years. (I’d imagine that the FB stock price would come along for the ride, too).
“Move Fast and Break Things”
Seriously. I’ve got a message for GOOG co-founders Larry Page and Sergey Brin: Wake up and smell the revolution.
Mr. Brin, I know you’re really into your super-important pet projects like Google Glass, but it’s time to literally get your head out of the clouds. While you’re busy overseeing aerial wind turbine projects, a 31-year-old down the street is going after YouTube, the third most-visited website in the world and one of Google’s most important assets.
I’m talking, of course, about FB CEO Mark Zuckerberg, whose one-time motto was to “move fast and break things.” And, he’s trying to do just that with the dynamics of online video.
In the last three weeks alone, FB has made no less than four moves aimed at building its chops in video:
- Late June: FB teams with Time Warner‘s (TWX) HBO to offer the first episodes of new comedy series Ballers and The Brink on its site.
- Early July: Facebook adopts a similar strategy to GOOG, offering to share ad revenue with content creators in an effort to incentivize content creation. It also rolls out a new pricing format allowing advertisers to pay based on how long a user watches a video, instead of merely if the video is watched.
- July 7: Facebook begins testing a “floating” video feature that lets users keep watching video in a small player while scrolling through their news feeds.
- July 9: The NYT reports that Facebook is working aggressively to bring music videos to its platform.
Admittedly, just a week ago, I asserted that “FB cannot be YouTube.” There was too much disparity between the quality of an average view on each platform, I said. But, I allow myself to change my mind as new information comes available, and I don’t know anymore.
Clearly, there are pros and cons to buying FB stock, but with each passing day I become more convinced that the pros outweigh the cons…and that video might just be one of the biggest pros.
As of this writing, John Divine did not hold a position in any of the aforementioned securities. You can follow him on Twitter at @divinebizkid or email him at editor@investorplace.com.
