Facebook planning dedicated video site that could challenge AT&T, Verizon's Go90

Facebook: Free Basics now used by 19M people
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Facebook's (NASDAQ: FB) Mark Zuckerberg said that the company is working to create a dedicated video service that would give videos a more prominent position on the social networking site. Although details of the plan remain unclear, it could put Facebook into more direct competition with other Internet video providers like Google, as well as wireless operators like Verizon that are pushing their video services.

"Now 100 million hours of video are watched daily on Facebook. We've been testing new experiences like suggested videos which enables people to discover more videos they might be interested in," Facebook's Zuckerber said yesterday on the company's quarterly conference call, according to a Seeking Alpha transcript of his remarks. "We're also exploring ways to give people a dedicated place on Facebook for when they just want to watch videos."

Indeed, Facebook already sits in second place in the in the United States in comScore's listing of the top online video content properties ranked by unique video viewers, with around 88 million total unique viewers. Facebook sits far behind market leader Google and its YouTube site, but ahead of Yahoo, Vimeo and others.

But Facebook could well climb those rankings with a dedicated video site. And such a service could put the company into more direct competition with similar video offerings from the likes of Verizon and AT&T. Already, Verizon is pushing its Go90 video service with exclusive content from various media and entertainment companies, and the carrier has promised to bolster the service in the future with additional free and premium content options. AT&T, for its part, said its acquisition last year of DirecTV would increase its video options, and recently the carrier's CEO hinted that AT&T would begin offering new mobile video services in the coming weeks.

But whatever Facebook does in video, the initial likely result will be additional traffic on wireless networks. The company's recent decision to auto-play advertisements on its mobile service dramatically increased the video load on wireless operators' networks, according to executives from various wireless carriers and other companies.

In other Facebook news, the company said its Free Basics offering is now used by 19 million people across the globe. The program, part of Facebook's Internet.org effort, is designed to provide cheap or free Internet access to a handful of select Internet services through participating mobile carriers, generally in emerging markets like India.

Interestingly, though, a new BuzzFeed report on Facebook's Free Basics indicates that local wireless carriers -- not Facebook -- are the ones paying the cost of providing the free services, and that the service is generally being used by customers to lower their monthly expenses. The publication reported that in Panama, where 30 percent of Digicel subscribers use Free Basics, it's largely seen as a fallback option. "The majority of those customers also used paid data the month they used Free Basics," Digicel's Antonia Graham told BuzzFeed. "They use Free Basics when they have no credit."

During Facebook's earnings call, Zuckerberg also briefly mentioned the work the company is doing to provide free or inexpensive wireless Internet access in various parts of the world.  "Let's talk about our work on new breakthrough technologies that can help connect more people to the Internet and create transformative new experiences," he said. "This year, we expect to hold our first test flight of Aquila, our first solar-powered aircraft designed to beam Internet into communities from the sky. And we're also working on new advances in lasers to transfer large amounts of data faster and more efficiently than anything today."

Finally, Facebook announced increasing revenues from its mobile services. Specifically, the company said its mobile ad revenue reached $4.5 billion, up 81 percent year-over-year. The company said mobile ads now account for a whopping 80 percent of Facebook's total ad revenue.

For more:
- see this Seeking Alpha transcript
- see this BuzzFeed article
- see this Facebook release

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