Please ensure Javascript is enabled for purposes of website accessibility

The Only Clear Winner in the Google-Amazon War Is Roku

By Rick Munarriz - Updated Dec 7, 2017 at 4:25PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Alphabet and the world's largest online retailer are playing keep-away with their platforms, and Roku is showing that being platform-agnostic is the way to go.

Amazon.com (AMZN 3.15%) and Alphabet's (GOOG -0.27%) (GOOGL -0.21%) Google are trading blows at the worst possible time. The two tech giants are withholding support for key platforms in an effort to hold back the competition as we dive into the critical holiday shopping season, and The Verge chronicles the blow-by-blow details

This dangerous game of one-upmanship reportedly began a few months ago when Alphabet pulled YouTube app access from Amazon's Echo Show device. Amazon responded by removing Alphabet's Nest smart thermostats, cameras, and alarm systems from its storefront. Amazon is also not selling Alphabet's Google Home and Chromecast hardware. The stakes are about to intensify, as Alphabet will pull YouTube access from Amazon's more prominent Fire TV platform at the end of this month, just as Google Cast can't access Amazon's Prime Video offerings.

The article concludes by pointing out that asking Amazon's Alexa to buy a Chromecast leads to a pitch for an Amazon Fire TV stick instead. The second and final option is a Roku (ROKU 2.15%) device.

Five different Roku set-top devices and sticks.

Image source: Roku.

There's a winner in even a lose-lose battle

It pays to be platform-agnostic when two brawny behemoths are beating each other up. Fire TV will be less compelling next month given the top-dog status of YouTube as a free ad-supported service. Anything that Amazon does on its end to make its digital video offerings harder to stream through Google platforms and devices will also do nothing but hurt both camps. 

Amazon and Google won't always come to blows. Just last month we saw Amazon Music's Android app updated with Chromecast support. However, even if these titans of tech eventually settle their differences, the sting of the disruption lingers -- and Roku wins.

Roku's on fire these days. The set-top internet streaming device is still selling briskly, and a fifth of all smart TVs are now powered by Roku's operating system. More importantly, its installed user base is growing, and folks are leaning on Roku more with every passing quarter. Active accounts have soared 48% to 16.7 million homes over the past year. Streaming hours have risen by 58% to 3.8 billion hours with platform revenue soaring 137%, so engagement and monetization are off the charts. Now throw in a good reason for shoppers to steer clear of Amazon and Alphabet hardware this holiday season, and for Roku and it makes a good thing even better -- like topping a Chipotle burrito with queso.

Roku's agnosticism has been praised before. When Needham analyst Laura Martin boosted her price target on the stock last week, she pointed out how it's a beneficiary of the glut of streaming services that are available or are on the way. No matter who emerges from the inevitable content shakeout, Roku will win. Now we're seeing fisticuffs fly as Amazon and Alphabet play Rock 'Em Sock 'Em Robots, and no matter whose head pops here, Roku's going to be the one that comes out on top.  

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Roku Stock Quote
Roku
ROKU
$83.91 (2.15%) $1.77
Alphabet Inc. Stock Quote
Alphabet Inc.
GOOGL
$2,174.75 (-0.21%) $-4.51
Amazon.com, Inc. Stock Quote
Amazon.com, Inc.
AMZN
$109.56 (3.15%) $3.35
Alphabet Inc. Stock Quote
Alphabet Inc.
GOOG
$2,181.62 (-0.27%) $-5.83

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
316%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/02/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.