Youtube remains unprofitable 3 years after Google acquisition

#1

Post by holaberlin » Fri, Jul 10, 2009, 3:06 PM UTC

Youtube remains unprofitable 3 years after Google acquisition
dealbook.blogs.nytimes.com

Re: Youtube remains unprofitable 3 years after Google acquisition

#2

Post by radioactive21 » Fri, Jul 10, 2009, 3:13 PM UTC

it is not direct profits but it is indirect profits and strategic intentions as the reason google bought it. google wants you to use its services, the more you do the more you depend on them. video, voice, data, etc. they make profit as a whole, so you cant look at one unit and say it doesnt bring in profit. the longer you associate google with your video, voice and data needs they win.

Re: Youtube remains unprofitable 3 years after Google acquisition

#3

Post by vijayr » Fri, Jul 10, 2009, 3:45 PM UTC

video search isn't big today, but it'll probably be huge in the future, may be as big as text search if not bigger. same can be said about video advertising. at that time, who do you think is going to have tons of inventory at their disposal? Google

it is just part of a bigger strategy - text search, book search, audio/video search etc.

youtube is a long term investment. as long as G has money to keep it running/improving, they have nothing to worry about.

may be 5-10 years from now, the same ppl would say that the best investment that google made, is youtube.

Re: Youtube remains unprofitable 3 years after Google acquisition

#4

Post by abstractbill » Fri, Jul 10, 2009, 3:46 PM UTC

He cited research from Credit Suisse

Seriously? People are still citing that hack-job of an analysis? It didn't even take peering into account - it was ridiculous.

Re: Youtube remains unprofitable 3 years after Google acquisition

#5

Post by andres » Fri, Jul 10, 2009, 3:47 PM UTC

It's been a while since I learned something new from a nytimes tech article.

Re: Youtube remains unprofitable 3 years after Google acquisition

#6

Post by tom_rath » Fri, Jul 10, 2009, 3:48 PM UTC

radioactive21 wrote: post #2

it is not direct profits but it is indirect profits and strategic intentions as the reason google bought it. google wants you to use its services, the more you do the more you depend on them. video, voice, data, etc. they make profit as a whole, so you cant look at one unit and say it doesnt bring in profit. the longer you associate google with your video, voice and data needs they win.

Actually, the more you use Google's free services the more you cost them. It's the non-techies who are clicking their ads which are making money for Google so, for all their technical marvels, Google's revenue source(s) are pretty narrowly defined.

I can almost picture Steve Ballmer slapping his cheeks with a mocking "Oh, no! Google's dominating yet another money-sucking cost pit! Whatever shall we do?!?!" before bursting out in laughter.

Re: Youtube remains unprofitable 3 years after Google acquisition

#7

Post by Loopy » Fri, Jul 10, 2009, 4:02 PM UTC

This probably doesn't surprise anyone but their current business model is terrible. Why would anyone click on a text based ad which distracts them from the video they want to watch. I don't see why anyone would voluntarily do that. At some point google is going to have to bite the bullet and have video ads. Even if they are on after a video is shown they would be far more effective and desirable for advertisers.

Re: Youtube remains unprofitable 3 years after Google acquisition

#8

Post by patio11 » Fri, Jul 10, 2009, 4:03 PM UTC

vijayr wrote: post #3

video search isn't big today, but it'll probably be huge in the future, may be as big as text search if not bigger. same can be said about video advertising. at that time, who do you think is going to have tons of inventory at their disposal? Google it is just part of a bigger strategy - text search, book search, audio/video search etc. youtube is a long term investment. as long as G has money to keep it running/impr…

Video search isn't big today because there is exactly ONE use case for it: [heroes season 2]. Text search works perfectly fine for that -- you type in [heroes season 2], you will find Heroes, season 2. It is probably one of the best single domains for searching -- canonical or near canonical names for everything, with disambiguating numbers that users actually know, and built-in metadata which links all your canonical names together in a pattern users actually understand! Brilliant!

OK, so we've got Heroes season 2. Now we have the problem: do people want to pay money for it? Answer: well, no, not if they can get it free on Youtube. Piracy is Youtube's killer app. Unlike the iPod (piracy is the iPod's killer app, too, unless you think 20-somethings are filling 8 GB iPods at $1 a song), Youtube doesn't have plausible deniability or a convenient way to extract money from the pirates.

Re: Youtube remains unprofitable 3 years after Google acquisition

#9

Post by vijayr » Fri, Jul 10, 2009, 4:05 PM UTC

radioactive21 wrote: post #2

it is not direct profits but it is indirect profits and strategic intentions as the reason google bought it. google wants you to use its services, the more you do the more you depend on them. video, voice, data, etc. they make profit as a whole, so you cant look at one unit and say it doesnt bring in profit. the longer you associate google with your video, voice and data needs they win.

exactly. how many of MS products are profitable? every successful company has a handful of ultra profitable/successful products, and a bunch of average ones, some that take years to start making profit (as will probably be the case in youtube) and many products that may never make any profit. google is just making sure they get into as many online/mobile biz as possible.

Re: Youtube remains unprofitable 3 years after Google acquisition

#10

Post by moe » Fri, Jul 10, 2009, 4:08 PM UTC

tom_rath wrote: post #6

radioactive21 wrote: post #2

it is not direct profits but it is indirect profits and strategic intentions as the reason google bought it. google wants you to use its services, the more you do the more you depend on them. video, voice, data, etc. they make profit as a whole, so you cant look at one unit and say it doesnt bring in profit. the longer you associate google with your video, voice and data needs they win.

Actually, the more you use Google's free services the more you cost them. It's the non-techies who are clicking their ads which are making money for Google so, for all their technical marvels, Google's revenue source(s) are pretty narrowly defined. I can almost picture Steve Ballmer slapping his cheeks with a mocking "Oh, no! Google's dominating yet another money-sucking cost pit! Whatever shall we do?!?!" before bur…

I think Ballmer stopped laughing at google sometime between them crawling out of their garage 10 years ago and them approaching MSFTs market cap today.