YouTube Ad growth has risen by 60 percent in the 2nd quarter. This contributed to Google’s ad revenue rise of 11 percent which translated to $16.02 billion.
This YouTube ad growth spurred revenue resulted in Google Inc’s (GOOGL.O) shares closing up 16.3 percent higher at $699.62 on Friday, 24th July 2015.
This added about $65 billion to Google’s market value. The strong YouTube ad growth viewership alleviated investor anxiety about the potential threat from Facebook Inc’s (FB.O) venture into video streaming.
Google’s shares reached a record high of $703. This translated to the company’s market value of $471.50 billion. This in effect bolstered Google’s position as the world’s second most valuable company. The world most valuable company tag is held by Apple Inc (AAPL.O) which is valued at $741.8B.
With expected YouTube ad growth, Google is expecting a highest share price target of $800. This would make Google be valued at $545 billion.
YouTube Ad Growth Due To Growth In Clicks
Watch time for YouTube rose by about 60 percent in the 2nd quarter. More than any U.S. cable network, the video service had more viewers aged 18-49 on mobile alone.
Online video ads are estimated to be worth at least $17 billion in the US alone by 2017. And with the increased YouTube ad growth, the company looks best positioned to benefit. The company’s postion as the number one choice for advertising in the video category is further cemented by the fact that YouTube has an edge over Facebook due to more established monetization platform. This enables YouTube to attract the best content hence the expected YouTube ad growth.
With paid clicks rising by 18 percent, Google’s ad revenue was spurred to an 11 percent rise or $16.02 billion. Financial analysts expect further growth with a median price target of $672.
It should not be forgotten that with Google in the test phase of its driverless car, the company may in the near future grow to be the world’s most valuable company surpassing Apple Inc.