BATTLING FOR EYEBALLS: Four billion videos a day are being watched on FB. That's the same as YouTube.
REUTERS: It's 10 years to the day since the first clip (Me at the Zoo) was uploaded on YouTube, and the service - now owned by Google Inc - has dominated online video-sharing ever since.
But for how long?
Facebook Inc said that its users were watching four billion videos a day, compared with three billion in January and just one billion in September.
That was enough for at least nine brokerages to raise their price targets on Facebook's stock on Thursday despite the company's slowest quarterly revenue growth in two years.
Almost all analysts saw video advertising as one of Facebook's most promising areas for revenue growth.
"The Internet is experiencing something of an inflection point in terms of demand for video and mobile advertising, and FB may well be the single biggest beneficiary of this inflection," RBC Capital Markets analyst Mark Mahaney said.
Google does not disclose viewership or revenue numbers for YouTube, although the company said in January 2012 that it had reached four billion daily views.
That was almost seven years after YouTube's co-founder, Jawed Karim, posted the video of his visit to the zoo on the fledgling site.
Brokerage Cowen & Co estimates that YouTube's daily views will reach 7.9 billion by the end of the year, generating US$5.9bil (RM21.2bil) in revenue. The brokerage expects Facebook's revenue from video advertising to reach about US$1bil (RM3.61bil) this year.
Facebook launched auto-play video ads in March 2014.
"FB's video consumption growth remains explosive as it evolves into a premier digital/mobile video platform," Cowen analysts wrote in a client note.
Mobile ads accounted for 73% of Facebook's total ad revenue in the first quarter, up from 59% a year earlier.
"Looking ahead, we believe video will play a significant role in bringing more marketers to mobile," Facebook's chief operating officer, Sheryl Sandberg, said on a call with analysts.
"More than 75% of global video views on Facebook occur on mobile, and we believe mobile video will become more important to marketers over time," she said.
Facebook's net income attributable to stockholders fell 20% to US$509mil (RM1.8bil) in the three months ended March 31, while revenue rose 42% to US$3.54bil (RM12.7bil).
Adjusted earnings were better than the market expected but revenue missed.
Revenue from advertising rose 46% to US$3.32bil (RM11.97bil).
"... While ad revenue growth has been robust, the company appears to only be in the early innings of fully monetising video advertisements," Barclays Capital analysts said.
Analysts also saw plenty of opportunity to build a revenue stream from messaging service WhatsApp, photo-sharing service Instagram and virtual reality headset maker Oculus Rift. Facebook is investing heavily in all these products.
"Core Facebook continues to power results, and the well known catalysts remain on the horizon and a source of potential upside with Instagram ramping in 2016, WhatsApp in 2017, and Oculus in 2018," Piper Jaffray analysts wrote. — Reuters
