"In the not-too-long distant future, we
actually see a very profitable and good business," Google CFO
Patrick Pichette said during a conference call. "We are
really pleased with the trajectory."
Google has been
working more closely with Hollywood, agreeing to licensing deals with
Time Warner and Walt Disney. These partnerships will help bring
additional professional content to YouTube, which is seen as a
necessary step to help attract new advertisers.
analysts are now predicting YouTube will lose between $70M and $500M
throughout 2009, so Google's latest attempts to turn the site into a
profitable business must succeed. Despite paying such a heavy
price tag in 2006 -- and continually losing money -- YouTube's large
viewership could open the door for Google to one day make big bucks,
once officials figure out how to woo new advertisers to the
YouTube is now attempting to generate revenue throughout
the site, though site designers hope to avoid intrusive ads that will
drive users away from the site. YouTube uses banner ads on the
front page, text ads that run before, during and after videos, and
select videos, such as movie trailers or interviews, are located in a
"These are not
signs of what I call a smart acquisition, these are signs of a
dumb acquisition," Global Equities Research analyst Chip
Chowdhry told the San Francisco Chronicle.
it continues to carefully try and woo new advertisers, said the
company had "yet to realize significant revenue benefits from
our acquisition of YouTube," and that trend is expected to
continue through the rest of 2009. Even if the company is able
to begin turning a profit on YouTube, some analysts believe it still
won't be enough; for example, Bernstein Research said the ad revenue
wouldn't even cover bandwidth and data storage.
quote: Even if the company is able to begin turning a profit on YouTube, some analysts believe it still won't be enough; for example, Bernstein Research said the ad revenue wouldn't even cover bandwidth and data storage.