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Google still losing money on YouTube

17 June 2008 20:05 by Rich "vurbal" Fiscus | 15 comments

Many companies have tried and failed to emulate YouTube's success at capturing an audience. But despite their undeniable popularity there's one thing the viral video leader has yet to accomplish. They haven't made a single penny in profit.

At the Supernova technology conference YouTube's Director of Content Partnerships Jordan Hoffner was brutally honest about obstacles to attracting sponsors.

He said "We've seen that because of the increased fragmentation of audiences, brand advertisers that we deal with - Coca-Cola, Proctor and Gamble, General Motors - feel like they're missing something. They want to know how you reach a large number of people with a small amount of money."

Maybe the larger issue is that he assumes a lack of understanding is at fault, rather than a flawed business model. Maybe a service like YouTube needs to be an add-on to another business in order to make money. Having an interesting product is great for attracting traffic, but not all traffic can drive revenue.

In the case of YouTube they seem to be running into the perception that becoming more commercial means not being YouTube any more, and maybe that's a fair criticism. If so, it means that in order to have advertising it needs to somehow blend into YouTube's existing service instead of altering the service to include advertising.

If anyone has figured out how to do that they haven't let YouTube in on it.

Permalink to this article | Topic: Online video

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Discuss this article!
tripplite (Senior Member) 17 June 2008 21:39
good die youtube........ honestly why is that the guy with 1 millions view videos load in an instant?? but me??? my video don't even load some weeks:( then they give error messages saying it was no longer available??? favoritism is a terrible.....i upload videos i created MYSELF and then youtube smacks me down with plagiarism?? wtf?? like myspace is dieing out so will youtube.....did i mention the terrible quality?? ...chris tucker: LEAVE BRITTTANNNY ALOONE! hehehe! [ + quote]
escalante (Member) 17 June 2008 22:30
*Quote:* chris tucker: LEAVE BRITTTANNNY ALOONE! I still can't get over how feminine that dude looks...if he is a dude! [ + quote]
Pop_Smith (Senior Member) 18 June 2008 0:45
It sounds like Google has yet to turn profit off YouTube, however at a price tag of $1.65billion it makes sense that it is going to be a long-time before it turns a profit. However, it is closing in on two years since their purchase; I'd say if they don't make profit by the 2.5-3 years mark its either not going to happen, or it won't be very profitable in the long run. [ + quote]
pensfan12 (Newbie) 18 June 2008 3:20
*Originally posted by tripplite:* good die youtube........ honestly why is that the guy with 1 millions view videos load in an instant?? but me??? my video don't even load some weeks:( then they give error messages saying it was no longer available??? favoritism is a terrible.....i upload videos i created MYSELF and then youtube smacks me down with plagiarism?? wtf?? like myspace is dieing out so will youtube.....did i mention the terrible quality?? ...chris tucker: LEAVE BRITTTANNNY ALOONE! hehehe! Youtube will not die out. People want entertainment and thats what Youtube provides. People got sick of myspace's shit and Facebook came, thats why Myspace is slowly dying. [ + quote]
7thsinger (AfterDawn Addict) 18 June 2008 8:22
I could really care less about YouTube, and therefore could care less whether or not they turn a dime at all. I don't think they're going anywhere, at least not for a while though. [ + quote]
susieqbbb (Member) 18 June 2008 11:06
You know what youtube would be making money if they would advertise things people would be interrested in [ + quote]
ZippyDSM (AfterDawn Addict) 18 June 2008 11:37
I like youtube its a great medium for small crappy vids with a decent comment systm, however thier rules around CP infringement are vauge and ludicrous to fix they told me to contact the UK department over a dispute with a unlicsend in the US anime, fck that, while its longer than a clip should be it was a great clip and did nothing but promote the Gdamn show, if the media mafia wants to control things so complete then I have no need for them at the retail level. YT would only break even if they put ads up and I do not think they are willing to start making money that way. [ + quote]
gallagher (Member) 18 June 2008 12:17
Youtube has been nice. But it is just a fad. Just like Geocities (and Angelfire), just like MySpace, just like all the other sites that come and go. It is good because it stimulates others to come up with something better and as we see the old ones die. The Internet is a wonderful example of capitalism. [ + quote] This message has been edited since posting. Last time this message was edited on 18 June 2008 12:18
DSWarrior (Newbie) 18 June 2008 12:56
I agree with gallagher...YouTube, MySpace, Geocites, FaceBook and all those other "Networking Sites" are fads and they'll end up dying someday. The only site that seems to be stable and will keep that way is eBay...which is also a fad but a long-lasting one...since it's a store and not a gay-sexual predator-network-site....like MySpace and all those other pieces of shit called websites! [ + quote]
ZippyDSM (AfterDawn Addict) 18 June 2008 15:18
*Originally posted by DSWarrior:* I agree with gallagher...YouTube, MySpace, Geocites, FaceBook and all those other "Networking Sites" are fads and they'll end up dying someday. The only site that seems to be stable and will keep that way is eBay...which is also a fad but a long-lasting one...since it's a store and not a gay-sexual predator-network-site....like MySpace and all those other pieces of shit called websites! if you are goign to diss ready do it right gay social networking sites, gay as in spam and fake people trying to get into each other pants, I have a myscape page and only use it tot talk with the few people I already met in other chats and forums. Geocities was few websites for people on dailup and still basically is that, its tried to branch out but its still a cheap free hosting site. Youtube was made for people to host videos online but it got hamstrung by big media nickle and dimming it to death. [ + quote]
goodswipe (Inactive) 18 June 2008 16:26
/YouTube FTW! They brought us the crying wrestling fan. I can never get enough of that video! "It's still real to me damnit!" "I hope Newbies that come across your signature bar do not become intimated and decide this forum is for wisecracks and stick to other ones." -ofield [ + quote]
mokifa (Inactive) 19 June 2008 4:41
Nice thread! I really like your provided information. It's really helpful for me. Thanks a lot! p.s. i'm a (very stupid) spammer, does it show ? [ + quote] This message has been edited since posting. Last time this message was edited on 19 June 2008 5:06
domie (Member) 19 June 2008 19:03
*Originally posted by 7thsinger:* I could really care less about YouTube, and therefore could care less whether or not they turn a dime at all. I don't think they're going anywhere, at least not for a while though. so you're saying you care ? I think the expression you are looking for is "I couldn't care less" illiteracy kills [ + quote]
ganeshgi (Newbie) 21 August 2008 5:59
In my view youtube is king of the video web site but stil google is not getting any profit but if they give a chance to user to add users web site then many web master will intest to view youtube second:-if they role all video one by one on the first page then every user will get chance to show there video then user will intest on youtube because if some one upload video but no one view then user will be upset and never come back on youtube. if youtube incourage to advertiser to advertise then many advertiser will involve there then youtube will earn money this is just my view but this is nothing on youtube's mind http://www.nepalpackagetour.com [ + quote]
ZippyDSM (AfterDawn Addict) 21 August 2008 8:01
*Quote:* *Originally posted by 7thsinger:* I could really care less about YouTube, and therefore could care less whether or not they turn a dime at all. I don't think they're going anywhere, at least not for a while though. so you're saying you care ? I think the expression you are looking for is "I couldn't care less" illiteracy kills ZOMG ITS OVER 9000!!! :P [ + quote]