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Google (GOOGL) Targets Video Ad Dollars with FameBit Buy

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Alphabet Inc.’s (GOOGL - Free Report) Google announced the acquisition of digital marketing startup FameBit yesterday for an undisclosed amount.

FameBit’s technology platform connects brands with content creators on platforms such as YouTube, Facebook (FB - Free Report) , Instagram and Twitter (TWTR - Free Report) and helps them work together for product placement and promotion.

FameBit’s Potential

In its short three-year journey, Famebit’s digital marketing platform has become considerably popular.  The company has worked with big brands such as Canon, Adidas, Sony (SNE - Free Report) , Rovio, Conair, Paramount, Marvel, L’Oréal, Fiji Water GameFly, and Office Depot.

The company claims that it has helped brands and creators to work on more than 25,000 branded videos, creating over 2 billion minutes of watch time.

Google’s Interest

Online and mobile video consumption is soaring and Alphabet is strongly positioned with its YouTube platform. In a bid to target TV ad revenue, Alphabet allowed third-party (Nielsen and comScore) tagging of YouTube videos to determine the effectiveness of ads on the platform versus ads shown on TV. The Google Preferred program pulls out the top 5% of the most engaging content on YouTube for advertisers.

So, the buyout appears to be a part of Google’s intensified efforts to target ad revenues. Beyond YouTube, FameBit can connect brands to content creators on other platforms as well, thereby expanding Google’s content opportunities and contributing to its ad revenues.


Google stated that post the acquisition, FameBit will continue to operate as an independent organization and creators will have freedom with the way they want to work with brands.

Google’s vice president of product management Ariel Bardin stated in a blog post, “We believe that Google’s relationship with brands and YouTube’s partnerships with creators, combined with FameBit’s technology and expertise, will help increase the number of branded content opportunities available, bringing even more revenues into the online video community.”

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Currently, Alphabet is a Zacks Rank #2 (Buy) stock. You can see the complete list of today’s Zacks #1 Rank stocks here.

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