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Google + YouTube = 10X More Video Streams

While one research company has touted market share of visits to a few online video sites as a key metric with which to evaluate the transaction (reporting that YouTube has a 40 percent market share), comScore considers this to be misleading, especially when evaluating the impact of Google's acquisition.

Analyzing the transaction using share of visits suggests that all visits to video sites are equally valuable; but how can that be true? For example, one visit might result in only one video stream being viewed, while another visit can result in 20 video streams being viewed.

With the potential to insert an advert in every stream, clearly all visits are not of equal value when considering the advertising potential of any site that offers streaming video. The problem is compounded if market share is measured only within a few select sites and not across the entire Web.

According to comScore, the success of the YouTube acquisition will be judged on advertising sales, and Google’s ability to monetize the YouTube visitors and their video streams through advertising. To that end, comScore provided data on actual video streaming activity -- which is to say, the number of streams initiated through the leading video sites.

Importantly, the data shows that YouTube accounts for 9 percent of all streams (far below the 40 percent market share that has been reported using share of visits to only a few video sites) while Google accounts for about 1 percent of all streams served. As a result, through its acquisition of YouTube, Google has increased its number of streams by a factor of 10 -- Google sites served 60 million streams in July, while YouTube served 649 million streams.

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