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Can Google's YouTube Ever Turn a Profit: Revenue Up From $3 billion to $4 billion

     
2:32 pm on Feb 26, 2015 (gmt 0)

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Google's YouTube is, at this time, the undisputed leader in online video. Facebook is snapping at its heels, and yet, according to people familiar with the matter, Google's YouTube revenue is up from $3 billion to $4 billion. Quite a handsome figure, and growth, too, but is it a strong enough performance?

Google Inc. nurtured YouTube into a cultural phenomenon, attracting more than one billion users each month. Still, YouTube hasn’t become a profitable business. The online-video unit posted revenue of about $4 billion in 2014, up from $3 billion a year earlier, according to two people familiar with its financials,... Can Google's YouTube Ever Turn a Profit: Revenue Up From $3 billion to $4 billion [wsj.com]
3:56 pm on Feb 26, 2015 (gmt 0)

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If YouTube were an independent business, it might matter. But YouTube is just one part of a machine that generates enormous profits.
5:02 pm on Feb 26, 2015 (gmt 0)

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Google Inc. nurtured YouTube into a cultural phenomenon

YouTube was already a cultural phenomenon when Google bought it.

Eight years without profit is remarkably patient.

...
7:18 pm on Feb 26, 2015 (gmt 0)

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Most of this month, the majority of the ads I am seeing are Google Express. One might say they have no shortage of top advertisers and Google is just using the real estate to heavily market Google Express. I believe if they had top advertisers they wouldn't be running so many Google Express ads. My sense is that like most of their ad properties, CPM rates on YouTube have been going down - not up.
8:08 pm on Feb 26, 2015 (gmt 0)

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Can Google's YouTube Ever Turn a Profit:

IMO Google doesn't need to have youtube turn a financial profit..the user data ( particularly when the user data amassed there is collated with the data on the same user when they leave youtube and visit other sites which allow G to collect user data ) is worth more than the youtube site makes..

Youtube allows them to have a generation "hooked" ( and other generations use it heavily too )..and trackable all over the net..priceless..and the "youth" hasn't "fled" youtube like they have facebook..youtube does not go out of "fashion"..

G might release figures about youtube "profit/loss/break-even"..but do they really care..

Even people who have never and would never use facebook or other "social media" use youtube..

Pay no attention to what is going on behind the curtain..just watch the screen..while G watches you..
10:03 pm on Feb 26, 2015 (gmt 0)

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I remember the purchase being in the news (G buying YT).

iirc, the news showed a reporter asking one of the main YT guys about it, and he was obviously very happy. :)
12:44 am on Feb 27, 2015 (gmt 0)

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I think it depends on how you define profit. All the data Google learns about your video watching habits is useful to the Google machine.
3:19 pm on Feb 27, 2015 (gmt 0)

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The google is run by a ceo. To a ceo, profit revolves around stock options. So, if utube popularity boosts stock value, then utube is generating a profit.
5:41 pm on Feb 27, 2015 (gmt 0)

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Amazon has never worried much about profits, and it seems to be doing OK.

Business Insider published an article a few weeks ago about Amazon that may provide some useful insights:

[businessinsider.com...]
6:51 pm on Feb 27, 2015 (gmt 0)

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Amazon has never worried much about profits, and it seems to be doing OK.


The article you referenced says that Amazon takes what would be a profit, and spends it on new lines of business.

That's quite a different thing from what's going on with YouTube:

[after paying for content, and the equipment to deliver speedy videos, YouTube’s bottom line is “roughly break-even,”]

In and of itself, that's not terrible news for Google. However, if you zoom out, and compare that with the growth of other online video businesses, it means that YouTube will wither over time...unless they change something.
3:30 am on Feb 28, 2015 (gmt 0)

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Please don't post links to the Wall Street Journal, signing in to read articles is ridiculous. YouTube only seems to change things in ways that further irates everyone using it so how are they not making a profit on four billion in revenue? What is their revenue? (no I'm not signing up to read the article) Also YouTube just totally destroyed the entire web's embedding of YouTube videos, the object element no longer works! No, the object element is not necessarily Flash (because someone out there just has to open their mouth when they shouldn't). I now have to create an Administrative mechanism to template video items in my platform every time a third party has a drug party and changes things for the sake of change and not improvement.

John
1:00 pm on Feb 28, 2015 (gmt 0)

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The people who work at Mountain View may not have a good understanding of the type of people who hang out on Youtube
8:13 pm on Feb 28, 2015 (gmt 0)

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Please don't post links to the Wall Street Journal, signing in to read articles is ridiculous.


if you do a google search for a sentence from the article, an uncommon phrase, or the title of the article, a top result will frequently be that article on the WSJ website. if you follow the link from G search, often the article can be read. don't know if this works for multi-page articles. optional to add "wsj" to the search
9:31 pm on Feb 28, 2015 (gmt 0)

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Ultimately I believe YT will be a "sleeper" revenue performer in the future. The service is ingrained in the internet culture and it would not take more than a few content partners to kick YT over the top. At the moment break even is not a bad place to be for that many eyeballs.
8:06 am on Mar 3, 2015 (gmt 0)

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@aristotle - basically everyone? The profits from Youtube are not as big because the only thing working there are remarketing campaigns and big promotion campaigns. In my eyes Youtube will never be profitable in a sense that it will generate billions of pure profit. It does generate huge amounts of retention in to the circle of google properties though.