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July 8, 2009

Is YouTube's Lack of Profitability a Myth? (And If So, Does Google Perpetuate It?)

The idea that YouTube makes no money for Google is widely held by many. Even yours truly falls for it entirely too often considering I know better.

Last year, at a local interactive meetup, Google employees informed attendees of how advertisers get those specialized YouTube channels. They have to fork over $200,000 in advertising on the Google content network.

Ok, so that doesn't monetize YouTube directly, but Google is likely looking at the big picture of profitability instead of the limited scope of siloed revenues.

Of course, that hasn't stopped Google from traipsing down the yellow brick road of direct monetization. They enjoy contracts with the big music companies and recently launched video ads, which is essentially the Sponsored Links of YouTube.

Over at TechDirt, Michael Masnick is contemplating the idea that Google enjoys the myth that YouTube doesn't make any money. It helps them get bigger contracts and avoid bigger copyright issues (than it already has).

Indeed, with the recent joining of YouTube accounts to Google accounts, it appears that Google doesn't necessarily need YouTube to be a huge cash generator. The integration of Google products across the board is done so slowly, it irritates early adapters, but it quite possibly means a greater number of adapters over time.

All of this is pure speculation for industry observers. Only Google knows. Actually, probably only select Googlers know. But it's fun to speculate.

What are your speculations? Do share in the comments, won't you? (Bats eyes, says "Pretty please."

Posted by Nathania Johnson on July 8, 2009 3:05 PM

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Farhad  July 8, 2009 8:16 PM

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