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Amazon.com, Inc. (NASDAQ: AMZN)'s new video platform would fall at the long-end spectrum of long-term catalysts, Daniel Kurnos of Benchmark told Benzinga.
Shares of Seattle, Washington-based Amazon rose more than 3 percent after the online retail giant unveiled a new platform, Video Direct, which enables people to post videos to its website and earn money from advertising and other sources. This would put the platform in direct competition with Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL)'s YouTube.
"It's interesting because IAC/InterActiveCorp (NASDAQ: IAC), which is one of the largest video owners (Vimeo) has no interest in competing with YouTube. However, Amazon owns Twitch (most people forget), so there's no reason with prime adoption to not at least attempt to make a competing video service," Kurnos told Benzinga in an email.
Kurnos added that Vimeo knows they can't compete directly, as the platform is oriented more toward developers than consumers.
But, competing with YouTube will be a tough task for Amazon, as it is the market leader generating billions of dollars in ad revenue via its 1 billion plus viewers. That said, Amazon might be hoping that the new platform would help increase its customer base and complement its already successful video streaming service Prime, which has "tens of millions of members."
Answering how this new platform compares or ranks in terms of other Amazon's long-term catalysts, Kurnos noted, "In terms of LT catalysts, this would fall at the long-end spectrum of long-term, but obviously could be hugely impactful if successful. Just don't hold your breath for YouTube light any time soon."
Although advertising was always supposed to be a big area of opportunity for Amazon, the analyst said the company has to do it "without stepping on the toes of their seller base."
"Video ads would work nicely with their existing product set and probably wouldn't be a direct compete in many cases," Kurnos added.
At the time of writing, shares of Amazon were up 3.39 percent to $702.80.
Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.
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