YouTube still not profitable, but it's close

YouTube CEO, Eric Schmidt, told a French university today that Google's online video sharing website, YouTube, is getting close to being profitable.

According to Barrons.com, YouTube, five years old, hasn't made any profit since its launch. The giant online video sharing website generates more than two billion views a day from users all around the globe. Google purchased YouTube almost four years ago for $1.65 billion, a deficit it has yet to make back.

Although YouTube might not be profitable just yet, Google said they are very pleased with it's trajectory and expect it to start being profitable very soon. Google said last year that YouTube came close to profitable, but since then, hasn't surpassed its operating costs - a cost that Google Inc. has absorbed.

Google's CFO Patrick Pichette said they do not comment on YouTube, so knowing exactly how much the company makes or spends on operating costs is unknown. It costs Apple an estimated $1 billion a year to maintain the iTunes store, and YouTube likely costs more to operate bandwidth wise. Google earned $6.82 billion in revenue in the Q2 of 2010.

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People still watch youtube? for shame! unless you need to discover the next Justin Bieber or see the latest shot to the groin, youtube is worthless! If they worked hard at getting real content legally posted on their site besides a Lady Gaga video they could get to a profit easier with premium content providers paying more per impression for shows people watch instead of randomly inserting ads into everything.

Youtube has ads now? I've been using Ad Muncher for the last few years so I didn't even know that but it sounds annoying. I still think it's a shame Google had to get their hands on it and commercialize it.

Well it doesn't take a genius to realize that Youtube moves so much bandwidth 24/7 and ad revenue only goes so far. Ads don't even come close to the amount of money that is needed to move that much data. That being said, it's hard to actually verify this because remember, Google owns a lot of "dark fiber", acquisition made in the early 2000's so because they own the "pipelines" I'm sure they lease a lot of that out to other corporations in exchange for bandwidth. Google is very secretive about their "operations" so it is very difficult to know for sure, speculations at best.

I've never seen a single advert on youtube due to firefox + adblock plus. I suggest you all do the same if you haven't already And I agree, chromium adblocking is useless. Firefox FTW

I don't see your point in blocking ads. Every single free service on the internet wouldn't exist wouldn't it be for advertisements, and YouTube is no exception. Allowing Ads is supporting the service you are using. Neowin can continue to exist for the same reason : You seem so proud of being an AdBlock user, but to block Neowin ads and then to come here and write such things is hypocritical.

As aggressive as the advertisements have become, this surprises me... hope they don't decide to add more adverts to the site.

Google aren't a man in a garage. They optimise their strategy based on research to keep people engaged in the content (i.e. keep coming back) while sprawling as much ad space as possible without ****ing people off too much that it stops them from returning.

I think the big thing for youtube now is the cost of bandwidth and servers. It was only a matter of time before server processing power and storage became this cheap. Google buying large amounts of fibre has always been a part of google's strategy to reduce costs for both google search, and youtube. I doubt the user experience will change all that much.

If I see another ad in a video on youtube i'm gonna do something violent involving a chipmonk, youtube servers and a wrench....

Auzeras said,
If I see another ad in a video on youtube i'm gonna do something violent involving a chipmonk, youtube servers and a wrench....

Firefox + Ad blocker is your friend (insert equivalent for Chrome or whatever browser you use, except IE that I know how to block adds)

Auzeras said,
If I see another ad in a video on youtube i'm gonna do something violent involving a chipmonk, youtube servers and a wrench....
Or you could just get adblock plus for Firefox/Chrome. I'm not sure if it's available for other browsers though.

Auzeras said,
If I see another ad in a video on youtube i'm gonna do something violent involving a chipmonk, youtube servers and a wrench....

Those ads keep Youtube free.

satukoro said,
Or you could just get adblock plus for Firefox/Chrome. I'm not sure if it's available for other browsers though.

Adblock for Chrome is shoddy though. Still loads the ads into memory, it just hides them. The big draw for me is far less memory usage.

freedonX said,

Firefox + Ad blocker is your friend (insert equivalent for Chrome or whatever browser you use, except IE that I know how to block adds)

I must be missing something here. How can Ad blocker stop youtube from forcing you to view its ad videos when you can't watch the video you are going to when you have to watch those before the video you want shows up? I have Adblock and you still get forced into watching those videos.

ILikeTobacco said,

I must be missing something here. How can Ad blocker stop youtube from forcing you to view its ad videos when you can't watch the video you are going to when you have to watch those before the video you want shows up? I have Adblock and you still get forced into watching those videos.

I haven't gotten any video adds on youtube, like conventional TV adds. I'm talking about the 1 inch add that spawns on the bottom of the video

thatguyandrew1992 said,

Those ads keep Youtube free.
True, but it doesn't matter. Google will still pour money into it to keep it going. If they don't, Youtube will die the same way so many other video hosting sites are dying.

The profit for Google is no other company having this well known service at their disposal. They could have plastered it with advertisement for their own products but all in all its stayed pretty true to the original concept.

Orange Battery said,
The profit for Google is no other company having this well known service at their disposal. They could have plastered it with advertisement for their own products but all in all its stayed pretty true to the original concept.

well at some point youtube was plastered with chrome ads

Julius Caro said,

well at some point youtube was plastered with chrome ads


The entire internet was plastered with those ads, not just YouTube.

Blaze said,
So how does YouTube generate revenue anyways? Through ads?
Probably also through deals to feature some music videos, shows, live events, etc..

lordcanti86 said,

Ads. There are a TON of ads on YouTube

A small ad at the bottom of the video and ocasionally a video commercial is not much at all. Their ads are fine as long as the site is not bloated and loads slowly because of the ads.