How does Youtube etc make money?

SDK^ · 12 Dec 2006 at 23:04

vonhelmet said:
Basically idiotic investors will throw money at any stupid idea in the hope that they get lucky and ride the gravy train all the way to the bank.

Like Headrat said - sold for $1.5bn, they sure are laughing

vincent1989 · 12 Dec 2006 at 23:08

Joe42 said:
Google certainly do. Look at their share price, its massive. They must be making some serious money.

there are some addresses that pay google £1 per access of the link, the ones that come up on the right hand side, so that accounts for a little

trojan698 · 12 Dec 2006 at 23:10

The likes of facebook aswell, I mean google bought it for $2 billion but I can't see how they'll make money off it. No doubt they will though otherwise they wouldn't have bought it.

Joe42 · 12 Dec 2006 at 23:11

Energize said:
I can't believe some companies are stupid enough to believe internet advertising actually works.

Well it mostly does work, google is living proof of that.

If youtube is such a financial failure why did it get investment and why did it get bought by google for such a huge amount of money?

Al Vallario · 12 Dec 2006 at 23:15

Vai said:
In the thread about Google buying Youtube someone mentioned that Youtube actually didn't make money, and was running at a lose, not sure if that is true, but I can imagine it being the case.

Exactly.

YouTube doesn't, never has done and probably never will turn a profit. The service is funded almost entirely by venture capital (and now Google's deep pockets, I'd assume) with a tiny bit of income from advertising on the side. However, it's naive to assume that Google will be able to monetize video content like they did contextual text advertising. Video is a completely different beast, and it's simply not viable – and probably never will be – to fund the massive bandwidth costs solely from advertising revenue. Last time I looked into the subject – before the Google acquisition – YouTube were loosing upwards of a million dollars each month. I assume that figure has grown with its popularity.

*av

HEADRAT · 12 Dec 2006 at 23:20

Al Vallario said:
Video is a completely different beast, and it's simply not viable – and probably never will be – to fund the massive bandwidth costs solely from advertising.

Agreed but just think of all those lovely eyeballs Google can now control, Google's business has always been about advertizing and "sponsored links", this is how they make their money. They are experts at turning hits into $'s and while the bandwidth sucked by Yourtube must be crazy I would imagine they are now piggybacking on Googles extensive network infrastructure.

Bandwith isn't always expensive, in fact at many peering exchanges its free (port costs only)

HEADRAT

Vonhelmet · 12 Dec 2006 at 23:24

HEADRAT said:
Well if you were the idiotic investor that helped youtube then your laughing all the way to the bank on the back of Googles $, Google paid $1.65 billion, bwahahahhahaa!

True, here it has paid off, but there's plenty of times it doesn't.

HEADRAT · 12 Dec 2006 at 23:26

Sure, it just like gambling, some winners but loads of losers!

HEADRAT