# Is YouTube making profit now? **URL:** \ **Category:** Factual Questions\ **Created:** [November 3, 2012, 8:25am UTC](https://boards.straightdope.com/t/is-youtube-making-profit-now/639745 "2012-11-03T08:25:59Z")\ **Posts on this page:** 8\ **Page:** 1
**Author:** ![Qwertol](https://avatars.discourse-cdn.com/v4/letter/q/e274bd/32.png) [@Qwertol](https://boards.straightdope.com/u/Qwertol)\ **Post date:** [November 3, 2012, 8:25am UTC](https://boards.straightdope.com/t/is-youtube-making-profit-now/639745/1 "2012-11-03T08:25:59Z")
Back in the days, as not everyone may know, YouTube was continuously losing money. Has it changed now when Google is running things? ---
**Author:** ![aldiboronti](https://avatars.discourse-cdn.com/v4/letter/a/9fc348/32.png) [@aldiboronti](https://boards.straightdope.com/u/aldiboronti)\ **Post date:** [November 3, 2012, 8:52am UTC](https://boards.straightdope.com/t/is-youtube-making-profit-now/639745/2 "2012-11-03T08:52:01Z")
Google is relying on [AdWords for Video](http://venturebeat.com/2012/04/23/google-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. ---
**Author:** ![ExcitedIdiot](https://avatars.discourse-cdn.com/v4/letter/e/ea5d25/32.png) [@ExcitedIdiot](https://boards.straightdope.com/u/ExcitedIdiot)\ **Post date:** [November 4, 2012, 8:31pm UTC](https://boards.straightdope.com/t/is-youtube-making-profit-now/639745/3 "2012-11-04T20:31:05Z")
[http://www.reelseo.com/youtube-profitability-watch-update/](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](https://www.latimes.com/business/la-xpm-2011-mar-16-la-fi-youtube-20110316-story.html)** > > YouTube becoming a strategic model for parent Google ---
**Author:** ![sweeteviljesus](https://avatars.discourse-cdn.com/v4/letter/s/898d66/32.png) [@sweeteviljesus](https://boards.straightdope.com/u/sweeteviljesus)\ **Post date:** [November 5, 2012, 12:43am UTC](https://boards.straightdope.com/t/is-youtube-making-profit-now/639745/4 "2012-11-05T00:43:34Z")
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 ---
**Author:** ![Reply](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/reply/32/15952_2.png) [@Reply](https://boards.straightdope.com/u/Reply)\ **Post date:** [November 5, 2012, 4:25am UTC](https://boards.straightdope.com/t/is-youtube-making-profit-now/639745/5 "2012-11-05T04:25:47Z")
> [@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. ---
**Author:** ![iamthewalrus\_3](https://avatars.discourse-cdn.com/v4/letter/i/258eb7/32.png) [@iamthewalrus\_3](https://boards.straightdope.com/u/iamthewalrus_3)\ **Post date:** [November 6, 2012, 7:01pm UTC](https://boards.straightdope.com/t/is-youtube-making-profit-now/639745/6 "2012-11-06T19:01:02Z")
> [@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. ---
**Author:** ![Reply](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/reply/32/15952_2.png) [@Reply](https://boards.straightdope.com/u/Reply)\ **Post date:** [November 6, 2012, 7:05pm UTC](https://boards.straightdope.com/t/is-youtube-making-profit-now/639745/7 "2012-11-06T19:05:29Z")
> [@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. ---
**Author:** ![iamthewalrus\_3](https://avatars.discourse-cdn.com/v4/letter/i/258eb7/32.png) [@iamthewalrus\_3](https://boards.straightdope.com/u/iamthewalrus_3)\ **Post date:** [November 8, 2012, 6:22pm UTC](https://boards.straightdope.com/t/is-youtube-making-profit-now/639745/8 "2012-11-08T18:22:29Z")
> [@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](https://support.google.com/adwords/bin/answer.py?hl=en&answer=2454010).