Online Video Is Key for AOL

AOL (NYSE: AOL  ) has taken its fair share of hits over the past few years, but this multi-national mass media corporation is on the upswing, thanks in part to its investments in online video. While many investors have shied away from AOL recently, this company is ready to right the ship in 2014.

The impact of online video
Online video is the wave of the future for marketers, and will play an important role in AOL's long-term success. AOL chief executive Tim Armstrong told The Wall Street Journal that his company is gaining momentum, thanks to its commitment to online video. In fact, comScore ranked AOL third behind Google  (NASDAQ: GOOGL  ) and Facebook  (NASDAQ: FB  ) in unique video viewers in January. If AOL continues to make investments in online video, the company could watch profits increase, and shareholders could reap the rewards of these investments as well.

Several technology experts have predicted that more people will watch videos on mobile devices instead of desktop and laptop computers soon, as many new smartphones and tablets become available. Armstrong, meanwhile, is ready to provide online videos to mobile device users across the globe, and is also investing in mobile advertising, premium ad formats, and native advertising to help boost the company's earning potential.

"All three of those are areas we are investing in and have seen really good growth in overall," Armstrong told The Wall Street Journal.

How AOL stacks up against the competition
AOL faces an uphill battle against Google and Facebook, its chief rivals. However, online video offers plenty of opportunities for AOL to make headway due to a number of factors.

According to eMarketer, Google's revenue from search ads on desktop computers is expected to decline 7% this year. Google also faces challenges in fine-tuning its search engine to ensure that it works well for smartphone and tablet users, which could create an opportunity for AOL to extend its reach.

In addition, Facebook is rolling out online video ads next month. These ads could help Facebook increase profits, but may be tough for marketers. Ad Age reports that some video ads could cost upward of $1 million per day.

AOL is trying to make it simple for marketers to launch online video ads. This month, AOL's Adap.tv announced that it reached an agreement with Magna Global, a strategic media unit of IPG Mediabrands, to include television ads in its programmatic buying platform. The move enables marketers to launch online video ads that automatically target specific demographics , which could help AOL further boost its profits.

What to expect from AOL
AOL was once an Internet service provider, but now has the potential to become much more. Over the past few years, Armstrong has been a calming presence for AOL and has helped this company remain afloat. Today, with its commitment to online video, AOL is a strong investment that could provide substantial profits to shareholders in the near future.

The biggest revolution the world has ever seen
Let's face it, every investor wants to get in on revolutionary ideas before they hit it big. Like buying PC-maker Dell in the late 1980s, before the consumer computing boom. Or purchasing stock in e-commerce pioneer Amazon.com in the late 1990s, when it was nothing more than an upstart online bookstore. The problem is, most investors don't understand the key to investing in hyper-growth markets. The real trick is to find a small-cap "pure-play" and then watch as it grows in EXPLOSIVE lockstep with its industry. Our expert team of equity analysts has identified one stock that's poised to produce rocket-ship returns with the next $14.4 TRILLION industry. Click here to get the full story in this eye-opening report.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2875833, ~/Articles/ArticleHandler.aspx, 9/17/2014 11:46:28 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement