YouTube Gets a Makeover as Google Strives for Higher Monetization

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YouTube’s redesign last week showed the importance Google (NASDAQ:GOOG) is placing on increasing monetization on the world’s largest video site. [1] YouTube’s new look has a distinct social element to it, aiming to increase user engagement further. After taking on digital music providers through its music service, YouTube could soon become a direct threat to online video streamers like Netflix (NASDAQ:NFLX).
See our full analysis for Google’s stock

YouTube’s Objective: Increased Page Views for Every User

YouTube’s redesign is aimed at personalizing users’ experience in the site. The new look is reminiscent of a “news feed” typical of social networks where users can easily personalize & customize the channels they have subscribed to and get the latest developments on their subscribed channels. The move has visibly reduced the earlier “clutter” that existed on the YouTube homepage, making it easier for users to track channel updates and get relevant recommendations to subscribe to a channel.

However, we don’t expect this to be the final design yet. YouTube has spent around $100 million to sign up artists for their own channels (much like VEVO), [2] and it can be expected that Google would promote these ventures aggressively on the YouTube homepage in the near future.

We currently have a price estimate near $628 for Google’s stock, which is in line with the current market price.

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  1. Wall Street Journal: YouTube Redesigns Around ‘Channels’ Strategy []
  2. Wall Street Journal: YouTube Tees Up Big Talent []