How Will Facebook (FB) Stock React to Selling Video Ads on Behalf of Other Companies?
NEW YORK (TheStreet) -- Facebook (FB) - Get Report is now selling video ads on behalf of other companies, which could be a profitable move for the company and increase competition with Alphabet's (GOOGL) Google unit and other online ad experts, the Wall Street Journal reports.
Shares of Facebook are down 1.3% to $118.25 in mid-afternoon trading on Monday.
The Menlo Park, CA-based tech giant said it would help marketers sell and place "in-stream" and "in-article" video ads on third-party websites and applications, such as those operated by the Daily Mail and Mashable, the Journal said.
Facebook will receive an unspecified portion of the revenue.
Usually, Facebook takes about 30% share of revenue in its audience network and gives the remainder to publishers, according to a source cited by the Journal.
In addition, publishers can choose to include the video ads with content on Facebook's Instant Articles feature, where media outlets post articles instead of linking to their website.
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Separately, TheStreet Ratings Team has a "Buy" rating with a score of A- on Facebook stock.
The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins.
The team feels its strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.
You can view the full analysis from the report here: FB
