The Looming Battle That Could Determine Facebook's Future

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Last week, I wrote about how Apple (NAS: AAPL) was considering booting YouTube from iOS. Untrue, it turns out. Unbeknownst to me at the time, both Apple and Google (NAS: GOOG) had issued statements saying that Google would take full responsibility for developing and maintaining a distinct YouTube app for iOS.

In short: I made a bad call based on old information. My apologies, dear reader.

But the story doesn't end there. Apparently, Google needed YouTube to become distinct, in order to prepare the app to deliver ads over Apple's iOS devices, including the new iPad, and the highly anticipated fifth-generation iPhone, which is due out this fall.


YouTube has been serving ads for years, but only in the past two years has Google introduced newer pitches. Promoted searches, banner ads, sponsored videos, and skippable ads - which typically require only five to 10 seconds of watching before you can 'skip' ahead - are now found throughout the site, especially on its custom channels.

According to Wired, we'll soon see all these ad formats and more in YouTube's mobile apps. That's potentially a huge win for Google. According to the latest Nielsen data, mobile ads are doing more to influence e-commerce. Roughly 22% of smartphone owners who viewed a mobile ad in July went on to make a purchase via their computer:


Facebook (NAS: FB) , which has had trouble bringing ads to mobile users, can't like seeing this. Co-founder Mark Zuckerberg has said, many times, that he wants the company to create a better experience for mobile users. His passion for the subject has led to a flood of speculative reporting about Facebook developing its own smartphone.

We've yet to see evidence of a FacePhone. Yet, there's little doubt that battle lines are being drawn, and advertisers will bet on platforms that offer the best chance to engage users. With an improved YouTube for mobile devices, Google is moving quickly to capture as many of those dollars as it can.

Face the future
With the stock down about 50% from its IPO, investors should start taking a closer look at the social network. To help uncover the main story behind some popular stocks, The Motley Fool has launched numerous premium research services recently, including one on Facebook. In it, you'll get a detailed report on the company's opportunities and major risks in the years ahead, as well as included quarterly updates. Click here to read more.

The article The Looming Battle That Could Determine Facebook's Future originally appeared on Fool.com.

Fool contributorTim Beyersis a member of theMotley Fool Rule Breakersstock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Apple and Google at the time of publication. Check out Tim'sweb home,portfolio holdingsandFoolish writings, or connect with him onGoogle+or Twitter, where he goes by@milehighfool. You can also get his insightsdelivered directly to your RSS reader.The Motley Fool owns shares of Google, Apple, and Facebook.Motley Fool newsletter serviceshave recommended buying shares of Facebook, Google, and Apple.Motley Fool newsletter serviceshave recommended creating a bull call spread position in Apple. The Motley Fool has adisclosure policy.We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.

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