YouTube is on the path to profitability in the “not-too-distant future,” Google reiterated today during its third quarter earnings call. And while that may sounds all well and good, they actually had some more specific impressive numbers to back it up.
One is that YouTube is now monetizing over a billion video views a week. Last week, YouTube announced that it was serving over 1 billion video views a day, so if you do the math there, it means that YouTube is monetizing one every seven video views.
The company also noted that 90% of the top 50 advertisers according to AdAge have now run ads on YouTube. And of its homepage ad inventory, 90% of it sold out for the quarter in the U.S., with lower, but still impressive sale rates for the rest of the world. Google also noted that YouTube was just starting to unleash its pre-roll inventory and let its salesforce have a go at selling that to advertisers, which should bring in more money.
And with Warner Music Group back in the mix, they now have the four major music labels playing ball again. As a one-stop shop for many music videos, YouTube will also be able to sell ads against those, as well as make some money off of affiliate sales from iTunes and Amazon’s MP3 store.
Earlier this month, CNET uncovered that Google CEO Eric Schmidt admitted under oath that the company paid a $1 billion premium when it bought YouTube in 2006 (for $1.65 billion). The thought was always that the site was growing so quickly that they would scoop it up and figure out how to monetize it later. It would appear that they’re getting close to doing just that — albeit three years later.
berry good
Where are the morons that were beating goog on this acquisition? YouTube acquisition might be the 21st century equivalent of the Hotmail acquisition.
Hopefully Google will do a better job than Microsoft in maintaining the lead! So far they’ve done well.
I’m still here. Read through the spin and YouTube was overpriced, has bled cash for years and is continuing to bleed cash. Great investment so far.
I dont understand where the revenues come from… I have never clicked on single ad on Youtube.
The overlays are the most annoying thing for my entertainement, I hit the “x” button as soon as they pop up…
+1 what John Lopez said, I have never clicked on a single youtube ad. The overlays are very annoying and keep coming back at you. The ads they serve are generally irrelevant.
Do you ever click adsense ads? Neither do I. But there are people out there who do.
The problem with the ads on the incredibility archaic site is they are saying ads which in general don’t usually link to a nice site are more interesting than too hot for words breast area… The ads get clicked cause they make the little + so small.. and it is the most annoying thing.. I imagine most people simply close the new window.. youtube needs to do the following..
1. Put the ads below the player box.. most videos have slow spots, people will look.
2. Allow people to rate the sites and charge more per click for sites that suck.
3. Update the comment system. It should be in real time like facebook.
4. Stop making everything link to a gmail account.
5. Offer the partner program as a paid service. Buy your revinue for x % and have the amount they give adsense less as the user becomes more popular.
6. Create a real analytics service for $5 a month that will track your videos wherever they are used, linked and how many views they got in the linked places. This would indicated which blogs you should focus your time on in terms of interaction.
7. Allow the user to upload and time the release of videos. So you could upload say 5 parts to a series at once and then say I want them released on this date.
I could go on but man or man that site needs an upgrade.. shoot do it is a contest… why not buy ustream and integrate it right into youtube..
I didn’t anticipate YouTube being a profit center for Google but the company continues to perform well and make money at new businesses every year.
I am not surprised. I never doubted YouTube will get monetized.
YouTube is going to be a profit machine once it is fully up and running.
I have to leave at Chris Anderson-inspired comment..Youtube gets cheaper and cheaper to run (hardwarde,storage and broadbandwise) for every year. Of course the strain on the service also rises, since they are still growing, so there will still be huge costs.. But still , when they get profitable, and roll out more HD material from better cameras, and strike more deals with professional content owners there will be no turning back. Youtube will be fantastic (and profitable) in a few years. Well done Google!
Watch out, McDonald’s. YouTube is catching up.
they’re going to have to get a lot more creative than this
If some innovative methods of showing ads are found which are not annoying to the users and don’t interfere too much with the view of what they wanted to view, Google may start earning good revenues. After all, Google has access to most of the advertisers. However, displaying ads on text material and video material would be different ball-game and would require some path-breaking way to be a success in ads revenue, since unlike the text display (where there is enough space to show ads), in video display it would be difficult to do without distracting the mind of the viewer and irritating him.
Anybody have a good estimate of what kind of average cpm they are making? If they are making $5/1000 then that translates to $260m/year, which puts the acquisition at 6.5x revenues 3 years after purchase. Not so amazing, and well below their reported $700m costs this year.
Web and mobile ad network, Webmoblink launches new features and other exciting improvements to its fully automated self-service platform . You can now place multiple ads under the same campaign, choice of web and mobile CPC and CPM ads, advanced targeting , free landing page creator tool, optimized advertising for Iphone and Ipod Touch and much more. To celebrate the new added features Webmoblink is offering for a limited time a special offer to first-time advertisers and Agencies. Registration is FREE.
http://www.webmoblink.com.
Any feedback is highly appreciated
Maybe all those clicks are from people who want to remove the advertising and accidentally get the advertising clicked.
Having the ad beneath the video would be much better.
Do they have any ROI or CTR data on these? I get the sense that some advertisers have experimented with this format but I doubt they’ve gotten great results other than where they sell music on videos that contain said music.
I’ve clicked on Ads on Facebook, Adsense, hell even some banners but every time I get an ad on YouTube I reach straight for the [x] button and to be honest I couldn’t even tell you what ads or brands I’ve seen there. So even if CTR isn’t high, brand reinforcement and awareness isn’t probably getting much of a lift either.
they’ve already been showing ads on youtube for a while…
Would people really sit there and wait for a 15-20 seconds pre-roll ad?
Interesting info, but I still find the ads annoying. I don’t mind them showing, but the fact that after you close them and they keep popping up is a pain.
I also have noticed other issues after google bought them. It takes FOREVER to upload a video now. This is just my personal experience though.