"The king of American new media is born! YouTube's valuation could reach as high as $550 billion."

Investment firm MoffetNathanson said Monday that the value of YouTube could be as high as $550 billion, as the video-sharing platform became the largest television content aggregator in the United States last month. Analyst Michael Nathanson wrote in a report to clients, "This ranking measures the total television viewing on linear and streaming platforms, highlighting YouTube's dominant position in attracting audience engagement, surpassing traditional broadcast (and cable TV) giants like Walt Disney Company (DIS.US), Fox (FOX.US), Paramount (PARA.US) and NBCUniversal, as well as streaming giant Netflix (NFLX.US). Based on this and several other factors, we crown YouTube the 'king of new media.'" Nathanson stated that as of last year, YouTube has become the second largest media company in terms of revenue, reaching $54.2 billion, second only to Walt Disney Company. However, with the increasing user engagement on YouTube, revenue is also expected to increase, with a reversal expected this year. Nathanson explained that based on publicly traded peers, the independent value of YouTube could be between $475 billion and $550 billion, approximately one-third of the current valuation of parent company Alphabet (GOOGL.US). He has a "buy" rating on Alphabet with a target price of $210. Nathanson further stated that YouTube could become the "central aggregator of all professional videos" and could enter the $85 billion consumer pay-TV market, as well as the approximately $30 billion streaming market in the United States. Nathanson added, "In terms of monetization, when comparing YouTube's significant TV screen engagement with its estimated TV revenue, relative to its scale coverage and differentiated product, its monetization remains significantly lacking. This indicates that there is significant room for improvement in its profit strategy."