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What’s Alphabet Doing on the Virtual Reality Front?

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Google testing VR ads

Alphabet’s (GOOGL) Google has started experimenting with a mobile VR (virtual reality) advertising format, the company recently disclosed through a blogpost. The experiment is being undertaken at its internal workshop, Area 120.

Google has tied the decision to test its VR ads to its efforts to support the community of developers working on VR content. According to the company, it has come to its attention that developers are looking for ways to raise money to fund their VR application projects. Google believes it can help thse developers monetize their VR content via advertising.

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Shortage of content holding back VR

Part of the reason VR has been slow to gain traction involves a shortage of compelling content that could lead consumers to purchase VR systems. This partly explains why Facebook (FB), Sony (SNE), and HTC have all struggled to make meaningful gains selling VR headsets.

If Google can help developers raise funds for their VR content works, it could contribute to popularizing VR systems and potentially boost its own growth.

Incremental advertising revenue

If VR catches, it would not only be the developers making money off the market, but also Google generating incremental advertising revenue (QQQ) through serving VR ads. Google’s trial VR ads will initially run on VR platforms such as its own Cardboard, Daydream View, and Samsung’s (SSNLF) Gear VR.

Other potential platforms for Google’s VR ads include Facebook’s Oculus Rift and Sony’s PlayStation VR.

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