Is YouTube making profit now?

[Qwertol]

Back in the days, as not everyone may know, YouTube was continuously losing money. Has it changed now when Google is running things?

[aldiboronti]

Google is relying on AdWords for Video to make YouTube hugely profitable. Given YT’s ginormous user base it shouldn’t be difficult to turn it into a money pump.

[ExcitedIdiot]

http://www.reelseo.com/youtube-profitability-watch-update/

That article has a couple of estimates of Youtube’s profitability for 2012. They put it at between 1 and 2 billion. I’m dubious of those numbers, though. They don’t seem to account for expenses.

I don’t think Google has any obligation to separately report the profitability, IIRC YouTube is a wholly owned subsidiary.

Analysts disagree whether YouTube is profitable, and Google won’t disclose YouTube’s finances except to say revenue more than doubled in 2010. Critics of its $1.65-billion purchase have melted away.

YouTube becoming a strategic model for parent Google

[sweeteviljesus]

I recently read an article (sorry, no link) about the guy at google who figured how to make YouTube profitable. One of his innovations was to allow people to skip ads, charging advertisers only if the user watched the whole thing. This had the effect of causing advertisers create more compelling content.

Rob

[Reply]

@sweeteviljesus

I recently read an article (sorry, no link) about the guy at google who figured how to make YouTube profitable. One of his innovations was to allow people to skip ads, charging advertisers only if the user watched the whole thing. This had the effect of causing advertisers create more compelling content.

Rob

Wouldn’t that motivate advertisers to create less compelling content?

“BUY GADGET X! Blah blah blah SKIP NOW blah blah blah blah blah.” Free views, no payments.

[iamthewalrus_3]

@Reply

Wouldn’t that motivate advertisers to create less compelling content?

“BUY GADGET X! Blah blah blah SKIP NOW blah blah blah blah blah.” Free views, no payments.

If that were the only change, then probably.

But they’re also going to show your ad less often if people skip it. Because why would they give you free advertising?

They do the same sorts of things for text ads. You pay only when people click on them, but the more people click on your ads, the more people they get shown to. This optimizes both the relevance of the ad and the amount of money flowing to Google.

[Reply]

@iamthewalrus_3

If that were the only change, then probably.

But they’re also going to show your ad less often if people skip it. Because why would they give you free advertising?

They do the same sorts of things for text ads. You pay only when people click on them, but the more people click on your ads, the more people they get shown to. This optimizes both the relevance of the ad and the amount of money flowing to Google.

Are you sure about this? I thought advertisers bid against each other for display.

[iamthewalrus_3]

@Reply

Are you sure about this? I thought advertisers bid against each other for display.

Yes, they do that, too. Bidding higher will cause your ad to show up more often.

But Google only makes money if people click on your ad (or the case of video—at least according to this thread—watch the whole thing). So obviously, they don’t want to show the highest bid ad if no one clicks on it. They want to show the ad that makes them the most money, which is some combination of how often people click on it and how much you’ve bid for a click.

The exact algorithms are secret, but the general concept is public. See Quality Score.