YouTube cofounder Chad Hurley is looking to pull a Google on the $75 billion TV ad industry by introducing contextual ads. Hey, crazier things have happened, and if any one online video company can make it happen, it just might well be Steve Chen and Hurley’s brainchild, YouTube.
YouTube’s Revenues
The popular file sharing service sells its home page ads for nice $175,000 for 400,000 viewers, according to the already-venerable Paidcontent.org. That is per day, so times 30, the main page drives revenue of some $5.25M, assuming it can sell out every day, and judging by the site’s daily updates, there is no reason to think it does not.
At monthly revenues of $5M per month just for the main page, methinks that YouTube is already profitable and is probably trying to be coy about its financials, with its monthly bandwidth costs rumoured to be in the region of $1 million each month. Call me crazy, but that means that just with its main page alone, YouTube more than covers its bandwidth charge… of course, there are more to costs than that, but if those numbers are right, its revenue run rate is starting to look pretty, which is why Hurley said the site won’t need any more funding, though he wouldn’t say if the site is in the black.
It is, in case you forgot to do the math… because YouTube not only generates cash from its main page, but it has no compunction about running display banner ads on its pages. If the site serves 100 million video streams a day, then it generates 100 million pageviews a day. Judging by the site, it serves 1 ad impression per page, so it can estimated that it serves up 100 million ad impressions per page. Looking at the kind of clients I see, and the CPM these garner, it is reasonable that YouTube can make - every day - anywhere from $50K to $200K (assuming $0.50 to $2 CPM). Realistically, I would bet their ads yield $0.75 CPM, or roughly $75,000, but of course, who am I?
[To see how we derived $0.75 click here.
For more on how YouTube can manage its relationship with ad networks, click here.]
Oh, that’s right, I did work for 6 years in online advertising and worked with Fortune 500 advertisers, global agencies and small and large ad networks alike. So if YouTube generates $75,000 per day in display ads, and $175,000 from the main page, that is about $250,000 per day in ads, times 30 days, that’s a nice, cool $7.5M per month in revenues, excluding pre-roll ads!
Note that not surprisingly, YouTube stopped running Google or Yahoo’s text ads, which suggests that on social network and file sharing sites, CPC style ads do not make sense (and why Google probably overpaid by shelling out $900M for News Corp’s FIM’s properties, though that was a defensive move to counter MSFT and Yahoo’s aspirations in search).
Not only is YouTube wildly profitable, but it is - much like Google - keeping mum because if content owners knew just how profitable, they would think twice about giving YouTube content, pro bono. (Note that many websites lost their marbles when they say that Google makes money off their backs, that’s nonsense, since they cannot both welcome and love the traffic and complain that Google serves ads alongside links to their sites on its search results page.)
Is YouTube the next Google?
This begs the question… let me skip the question and get right to the answer: no, YouTube is not the next Google, it can conceptually be the same for its sector: ie. video, in the sense that much the same way that Google successfully indexed the world wide web’s text content, YouTube can index the world wide web’s videp content, but video, despite all of the hoopla (and I am Chief Hoopla Office as Executive Producer of Web TV producer WatchMojo.com) is not a market nearly as large as search advertising. Online video advertising might be worth $1 billion by 2009 - or $2.3 billion by 2010 according to eMarketer - but search advertising is already a $5 billion industry…
“We’re not even thinking about being acquired or going public” states Hurley.
Indeed, the reason for that the former entails a large company taking on massive legal risk - much like Bertelsmann did with Napster - while the latter entails them opening their books, which will literally piss off record labels and film studios…
Remember one thing: Napster irritated the record labels but only in the sense that it cost the labels money (tons of it). Considering YouTube’s [potential] revenues, content owners would be shocked to see what they are passing up. [Please do not misjudge this post as sour grapes, by the way: yes, WatchMojo.com is a content owner, but we are web content producer and see no cannibalization when we send YouTube our videos, to us, YouTube is a great partner that has put online video on the map.]
So, YouTube is the next…
It’s hard to both write this blog and be a Web entrepreneur. I see a lot and hear even more and a bird whispered in my ear that some in the company’s circles consider the Skype sale to eBay as a worthy comparable. Skype sold for obscene multiples to eBay (about $2 billion, with incentives pulling the price tag to $4.1 billion) despite having little revenues to speak of.
Now, it’s interesting to bring up Skype, since Skype was founded by the same two gentlemen who founded Kazaa, the P2P file sharing site that took over Napster’s place after Napster got RIAA’d. You see, it’s interesting to note that Chad Hurley and Steve Chen are masterfully learning from history: both Napster’s, Google’s and Skype’s.
Here is how: they know that like Napster, they are one massive legal setback away from being shut down. The reason no one is going after them is that the content owners have learned that thinking too defensively will cost them more in the long run than thinking offensively and creatively, like Warner Music has.
In fact, from a liability perspective, YouTube is far more of a legal risk than Napster ever was:
1- Napster only violated the copyright of record labels, much of YouTube’s content violates all forms of content.
2- Napster never hosted the content, it provided a conduit for the file sharing; YouTube hosts all of the content. It is not only an accessory to the crime, it is the principal player and beneficiary.
3- YouTube benefits directly - and good for them, Steve and Chad financed the project on credit cards, they got the VCs to back them and are now in the lead…
[EDITOR’S NOTE: A Reader did email me with the following, correct observation: it is definitely true that Napster - and its maverick pioneer CEO Shawn Fanning - gave the labels the one-finger salute and sought to take record labels down. Napster essentially allowed users to download and “assume” ownership of the files in question… YouTube, on the other hand, it must be stressed, keeps the files on its servers to ensure that if needed, they cannot remove them, as they did when NBC asked YouTube to remove the Lazy Sunday clip. Instead of telling NBC off, YouTube did act as good corporate citizens, promtply removed the content and extended an olive branch… This is just another example of YouTube’s founders learning from history and avoiding Napster’s mistakes. In other words, it can be said that for every similarity between Napster and YouTube, there are at least two differences. It not only reached out to NBC, but it probably helped secured the Warner deal by providing copyright protection tools as well.
And, the fact that YouTube kept the files on its servers now translate to giving it traction online, but initially, it simply meant that its costs would far outrun its revenues, at the founders own risk - they did use their credit cards initially, hence why they deserve all of the potential windfall that will come their way]
Which also explains how they have learned from Google. Google - like their deal with Yahoo! to get Yahoo! to feature Google’s search engine showed - played it coy. Everyone downplayed Google as a one-trick pony, but by the time they had to open up their books to go public, people were shocked and in awe of their degree of financial leverage. YouTube is borrowing from that playbook: by keeping mum on revenues, it is not drawing the ire of competitors and content owners.
What they are doing now, and this gives Steve and Chad all of the credit in the world, is proverbially changing the jet’s engines at 30,000 feet (for others who have made such maneuvers, click here): they are methodically swapping out suspicious content with legitimate content. All of the talk about their different ad trial and error is, in my humble opinion, a smokescreen for the real trial and error tests: to swap out the copyright violated content with legitmate ones, and by signing up partners who realize that YouTube cannot be ignored anymore.
Are there any threats to YouTube?
When a company earns abnormal profits, competitors pay attention… or so goes the economic theory. Anyway, of course it is true that when Google Video, MySpace and Yahoo! try to take you down, that is a threat. And naturally, when an upstart like Revver pays content providers, that is a threat too. With time, YouTube will adapt, but what I suspect, is that the same way new social network sites no longer talk about replacing Myspace but complementing it, most people in video realize that YouTube has charged out of the gates, leveraged a perfect storm of sorts and will be hard if not impossible to catch.
But this begs the question, will YouTube get Skype-like dollars? Listen, nothing will make me happier, cause it will be yet one more shot in the arm of online video, a segment I have invested in. But, Skype was a tool that helped eBay increase conversions to its core business and help eBay get into a new field altogether. YouTube does not really provide - under its current denomination - that kind of solution to any would-be buyer…
And in the event of an IPO, well, YouTube carries way too much legal risk for any serious investors to bite. And, let’s face it, YouTube’s founders have yet to fully undergo the cleaning of their libraries to finally divulge to the media powers that be how profitable they actually are.
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October 3rd, 2006 at 8:19 pm
“The popular file sharing service sells its home page ads for nice $175,000 for 400,000 viewers, […]”
One, an ad on one page for one day for $175K with a reach of 400K uniques? Bubble, anyone? Is that ad really that valuable to advertisers? I smell irrational exuberance …
While $1MM/month bandwidth cost sounds like a lot, it’s not fair to say “they’ve got to be profitable” when you gloss over all the other costs (hardware and other hosting costs, ad sales team, etc.). Do we really believe that bandwidth is their biggest cost?
“If the site serves 100 million video streams a day, then it generates 100 million pageviews a day.”
Wrong. How much of YouTube video is streamed from youtube.com vs. embedded on blogs and other sites?
It’s interesting speculation on your part as to YouTube’s revenues, but there’s just not enough data to support your claims nor make real assertions around the long-term viability of YouTube.
But, it is important that we (collectively) examine these businesses in objective ways, looking for what truly does work and what is sheer folly of venture capital.
October 3rd, 2006 at 8:38 pm
Great post. If Youtube alone is on track to pull in more than $100MM a year in video ad revenue - then the video ad industry is probably already worth $1bn if fully monetized. The legal battles will be interesting to watch tho!
October 3rd, 2006 at 8:53 pm
[…] Here’s an interesting post speculating on YouTube’s revenue and strategy. […]
October 3rd, 2006 at 9:24 pm
Insightful post! YouTube might be the next hottest Internet company even with the potential lawsuits.
October 3rd, 2006 at 9:43 pm
Good post. The numbers are quite amazing, but I think one needs to dig a bit deeper.
Buying advertising is like buying a car - no two purchasers pay the same price. Discounts are given to first-time purchasers, volume purchasers, high-value (i.e. big names that attract other customers) purchasers, etc. Assume that discounts of at least 20% are given to some advertisers and that the sales team / agency takes a 20% chunk of what’s left.
On the costs side, bandwidth is not YouTube’s only cost.
October 3rd, 2006 at 10:29 pm
1 thing you got wrong. Youtube doesnt just leave the video on its servers, it download the video to your PC. That keeps them from having to pay for bandwidth every time the video is played
it also screws their chances of being protected on copyrights
October 4th, 2006 at 1:42 am
So people are paying a CPM of $437.50 to advertise on YouTube’s homepage. Nice waste of money…
YouTube is toast…trying to do deals to make it legit is polishing the brass on the Titanic.
October 4th, 2006 at 4:36 am
Is YouTube Grossing $7.5Million a Month?
According to HipMojo.com, YouTube could be pulling in $7.5 million a month from advertising revenue. Monthly bandwidth costs are rumored to be around $1 million a month, so if it is true, YouTube is still clearing quite a bit.However, one…
October 4th, 2006 at 5:06 am
Great post. I have come to believe that YouTube will be sold for a lot of money - and the lengthening list of revenue streams pays testament to that.
If I was invested in that company I wouldn’t hold on too long though. Unlike MySpace users are not locked in and the threat from Google, Yahoo!, MySpace, Revver, or even VideoEgg shouldn’t be underestimated. They could go the same way as Alta Vista or Lycos.
October 4th, 2006 at 6:08 am
An interesting and persuasive argument.
October 4th, 2006 at 8:09 am
[…] No se si será real o no, pero la aproximación parece buena ¿no?. Podéis leer más en el artículo original. Artículos relacionados: Inserta vídeos de Youtube en función de los tags.Un blog rentable. […]
October 4th, 2006 at 8:47 am
[…] Following up on my previous post on YouTube definitely being profitable, but why they prefer to keep mum, I have added the breakdown of what YouTube’s average CPM should be. […]
October 4th, 2006 at 9:21 am
[…] Maybe. […]
October 4th, 2006 at 9:43 am
Occam’s Razor — the scientific truism that the simplest explanation is usually the most accurate — says that NFW is YouTube profitable or doing even remotely what you speculate? Why? Because in Saul Hansell’s recent article on YouTube, Hansell asked Hurley straight if YouTube was financially healthy… Hurley waffled and equivocated. Twice.
Occam’s Razor — if youTube was so wildly profitable why O why would Mr. Hurley hide the fact?
Only because it is not a fact.
Swami predicts: YouTube will raise another huge round of VC funding in next 6 months, to underwrite their still large ongoing operating losses. That’s no sin, of course. But jeez louise, can we please stop the endless hyperbole?
October 4th, 2006 at 11:23 am
Good analysis on YouTube´s financials. Besides all the threads mentioned in this blog, I wonder that there was no word about the site`s stickyness. What makes people to continously visit the site in frequent manner.
Moreover, this also questions the quality of traffic advertisers are looking to invest into. Eyeballs are still the driving currency, however I would find it challenging to sell FMCG products next to a video clip showing fraternity experiments.
If YouTube manages to get a serious media partner on board to help diversify its mainly user generated content to tradional content delivery - YouTube might become the media distribution plattform every company is looking to get into.
October 4th, 2006 at 1:28 pm
Selling the homepage out north of $400/CPM, and selling out the bulk of banner ads at $.75-$1/CPM? Not likely. Best guess, 1/3rd of those numbers.
With that said, as most of the advertising on thier site seems to be sponshorship / pakage deals, it can be hard to break out numbers by eCPM x pageviews for YouTube in partiular.
October 4th, 2006 at 1:47 pm
Actually PaidContent states:
The home page video ad, which NBC and ESPN use to plug new shows, generates around $175,000 and 400,000 viewers.
It generates 400,000 views (its a typo) not $175K per 400,000 views. Otherwise that would equal a CPM of $473.50.
Where exactly did you work in online advertising for 6 years? The IT department?
October 4th, 2006 at 1:50 pm
[…] Interesting to see all of the feedback and comments on our post about YouTube’s potential revenue and its potential eCPM of $0.75. It should be noted that unlike some, we did not come out and throw out a random valuation for the company, or say “this is what they make.” […]
October 4th, 2006 at 3:00 pm
[…] HipMojo.com - IT, Video, Web, Technology, Gadgets » YouTube IS Wildly Profitable - No Doubts About It: I wager that their bandwidth + hosting + overhead costs are MUCH MUCH more than 1 million a month. Advertising revenue is linear while the rest of their overhead is exponential. […]
October 4th, 2006 at 3:40 pm
Something isn’t clear about “$175,000 for 400,000 viewers” ?
It would be insane to pay more than $2000/day for 400k impressions to the front page. Even if that’s 400k *clicks* to the advertiser, that’s still only $20,000/day at 5 cents/click, and I doubt this traffic is worth even that much.
October 4th, 2006 at 4:07 pm
These numbers would make more sense to me if it was $175,000 per month for 400,000 views per day. That would work out to a CPM of $15.
October 4th, 2006 at 10:48 pm
Sorry, this $175k/day speculation for homepage placement is getting me hot under the collar. Such an assertment is incredibly annoying and runs against any sane assement of a business. This Forbes article was a complete puff piece and rife with blind speculation. For a better assesment, I think the recent NewYork Times articles is better balanced.
They are loosing money now. They are “stable” as Chad Hurley says because Sequoia will continue to subsidize this company since it is their crown jewel these days. They don’t seek outside financing because they are already covered by their current VC’s. They will not announce any subsequent financing rounds (after the announced 2nd round in April 2006) because they don’t have to.
Come on now people, this isn’t difficult stuff!
Mark Cuban may focus on the Copyright angle, but I’m all over YouTube as an operational proposition (revenue vs. expenses). I’ve been in Internet Video since 1999, so I know a bit about how things work a bit on the revenue/expense side. My instincts say this it’s not lining up even closely.
As I’ve said many times, I’m enjoying the YouTube debate/discussion, but I’m getting tired of this gross hyperoble!
October 5th, 2006 at 5:13 am
[…] HipMojo is running a compelling argument that YouTube isn’t going anywhere anytime soon. Despite numerous naysayers, and various threats from the media industry, sites like YouTube are the beginning of a giant sea change in media. Combine it with TiVo and other PVR products and it has the capability to kill cable TV dead - or at least, turn it into something much more powerful. […]
October 5th, 2006 at 5:21 am
Who is this blogger? Pulling numbers out of his ass and getting links and comments from other bloggers makes him legit? Youtube is wildly profitable….coming a week after 2 respected research firms and a not so respected basketball team owner stated that youtube is doomed. yeah, i bet this blogger has his finger on the pulse while people who are paid hundreds of thousand to analyse companies for a living got it all wrong.
October 5th, 2006 at 5:23 am
typical dickhead blogger. deletes any comments that question his precious post.
October 5th, 2006 at 7:01 am
[…] HipMojo.com - IT, Video, Web, Technology, Gadgets » YouTube IS Wildly Profitable - No Doubts About It (tags: youtube advertising Video business content ad revenue) […]
October 5th, 2006 at 11:52 am
Predictions about YouTube read overly optimistic to me… YT may serve 100 million video feeds but a significant percentage of that is pulled from other websites and does not add advertising inventory to YouTube.
October 5th, 2006 at 12:45 pm
[…] Hip Mojo has an interesting piece on everyone’s favorite viral video site, YouTube. The site does a little bit of math and estimates the amount of revenue You Tube brings in each month. By their estimates, they seem pretty damn certain that You Tube is making loads of money and will continue to do so as old-minded advertisers get on board. Interesting read for sure. […]
October 5th, 2006 at 3:04 pm
[…] HIP MOJO — Oct 4 — YouTube cofounder Chad Hurley is looking to pull a Google on the $75 billion TV ad industry by introducing contextual ads. It currently sells its home page ads for $175,000 for 400,000 viewers. $5.25M a month for the home page. Its monthly bandwidth costs are rumoured to be in the region of $1 million each month. But, YouTube is far more of a legal risk than Napster ever was. FULL ARTICLE @ HIP MOJO […]
October 5th, 2006 at 4:58 pm
[…] Two days ago, I posted something on what YouTube’s potential revenues might be. Frankly, I was surprised that few analysts, writers and so-called experts had not taken a few minutes to scribble down - if nowhere else than on a napkin - what the company (founded and launched just last May 2005, mind you) could be generating. […]
October 5th, 2006 at 5:26 pm
[…] La publicación hace una semana de una noticia que afirmaba que YouTube podía estar a la venta por 1.500 millones de dólares ha dado lugar a todo tipo de reacciones durante esta semana. Mientras algunos, como Mark Cuban (conocido inversor Americano) afirman que habría que ser idiota para comprar YouTube, muchos no están de acuerdo con esta opinión (algunos indican que YouTube es candidato a llegar a ser una IPO en un futuro no muy lejano -algo que veo poco probable porque YouTube está vive con la amenaza permanente de tener que enfrentarse a litigios por infringir derechos de copyright). Sin embargo, lo más destacable de todo lo publicado es el artículo del blog HipMojo que afirma que YouTube podría estar ganando, a día de hoy, $7,5 millones mensuales por ingresos relacionados con la publicidad. A esta cifra, a la que llegan mediante cálculos propios, está en la línea de la que se obtiene ($5,25 millones generados por la página principal de YouTube) a partir de los datos publicados en paidContent.org, dónde se afirma que YouTube ingresa 175.000 dólares diarios por la publicidad de su página de principal. En cualquiera de los dos casos, una vez restados los gastos (entre los que destacan los del ancho de banda), podríamos estar hablando de unos beneficios del orden de $60 millones anuales, que aunque elevados siguen sin parecer suficientes para justificar su precio. […]
October 5th, 2006 at 6:08 pm
[…] A couple of days ago I posted my thoughts on what YouTube’s revenues could be. Note the key word here is could. I never said YouTube makes or even should make so-and-so amount. I said: “given the facts, assuming a few things, YouTube can make this much if it plays its cards right,” suggesting that all of the worries about its bandwidth costs are overblown. […]
October 6th, 2006 at 2:32 pm
[…] I saw this Google on several feeds today and immediately thought what a great idea this would be, nor was I very surprised at all. Google has been terrific about trying to develop cool new features, like the calender, gmail, etc. And they have done a great job in recognizing other companies that already have a great product that they can utilize buy purchasing them, Writely for example. Google has tried the video route with Google Video, but not with much success or fanfare. Meanwhile YouTube has gone huge generating huge demand and an even bigger following. This seems one of those perfect examples for Google to jump and buy them pulling them into the fold and capitalizing on the success. I saw an article yesterday from HipMojo.com titled, “You Tube is Wildly Profitable - No Doubts About It” […]
October 6th, 2006 at 6:59 pm
[…] Film) bookmarken mit del.icio.usdel.icio.us Digg Furl reddit Shadows Spurl Yahoo MyWeb Yigg Trackback-URL Gelesen: 1 heute:1 […]
October 7th, 2006 at 8:33 pm
I can see how Google likes these types of websites. Its not just the number of viewers but Gogle already has an ad management program with adwords. Will the internet be one big Google network?
October 8th, 2006 at 4:43 pm
[…] Mucho ruido sobre los coqueteos de Google con YouTube pero pocos datos. En HipMojo dan algunos datos interesantes: YouTube actualmente ingresaría 5,25$ millones al mes por la publicidad de su página principal, mientras que sus costes de ancho de banda ( su mayor gasto ) no superan el millón de dolares anual (100 millones de videos servidos al día ). Ni sus ingresos ni sus gastos paran ahí pero este cálculo burdo indica que ya están en claros beneficios y que, si son comprados, no será por necesidad financiera. […]
October 8th, 2006 at 10:33 pm
[…] Ashkan Karbasfrooshan declares YouTube to be wildly profitable with a good analysis of the splash page CPM. Ashkan’s analysis is a reasonable guess of the short-term limits of YouTube’s market cap. […]
October 9th, 2006 at 12:14 pm
[…] 3) YouTube is profitable — that’s not a fact, but HipMojo.com ran the math and it’s hard to dispute. We’ve known YouTube’s bandwidth bills were $1 million/month roughly 6-months ago, but they’ve never publicly commented on their revenues and whether they’re profitable or not. I suspect they are, but just haven’t brought light to that fact — because then the TV networks (copyright holders) would likely start knocking down the doors with their lawyers. […]
October 9th, 2006 at 4:47 pm
Confirmado: Google Compra YouTube
Acaba de salir hace escasos 8 minutos a portada del New York Times la confirmación que muchos estaban deseando, y que otros no podían creer ni por asomo: Google ha comprado YouTube por 1.650 millones de dólares, en un movimiento que le coloca como e…
October 9th, 2006 at 5:49 pm
[…] Sempre li que o YouTube era deficitário, pela primeira vez vejo a informação que o YouTube é rentável e bem rentável. No post tem uma série de links com o raciocínio que sustenta esta informação. Ela sustenta que o YouTube se diz deficitário para que os provedores de contéudo (eu, você, todo mundo) não peçam uma parte deste pequeno e novo latifúndio. […]
October 9th, 2006 at 7:03 pm
[…] Now we may get through an hour in RSS land with out an inbox full of the rumor/anit rumor posts. In any case, Michael Arrington just released the post finally announcing the deal, Techcrunch » Blog Archive » Google Has Acquired YouTube. Both companies agreed to the deal which amounts to $1.65 billion. I was surprised to see that Yahoo was in the bidding war to the very end. This post isn’t so much about the deal itself, rather the furor that has surrounded it the last couple for days. I must admit I love to follow Techcrunch and all the great, and some not so great, products it gives us the scoop on. I was intrigued when I first read the initial rumor post Completely Unsubstantiated Google/YouTube Rumor from TecCrunch. Then the floodgates opened, some positive and some not so positive. I for one saw this deal as a win-win for both Google and Youtube. As I said, and then saw pointed out in some other blogs later on, YouTube could be an advertising bonanza, evidence HipMojo’s post You Tube is Wildly Profitable. Why would Google not want to capitalize of all that revenue? Honestly though there were some posts that were not so positive, not about the deal itself but rather about the chain of blog events that followed Michael’s initial post on the subject. TechDirt had a post along these lines. Of course there were also the Mark Cuban post, Some thoughts on Youtube and Google on the ludicrous nature of even the thought Google should do this. […]
October 10th, 2006 at 12:14 pm
[…] Of note, Mark Mahaney pegs YouTube’s 2007 revenues at $112 million, we called for about $90 million in 2006. […]
October 10th, 2006 at 3:14 pm
[…] On a related note, and another bit of not so awesome news, Google just bought YouTube. And for those who have wondered how YouTube is actually profitable, aside from the recent sale, here’s some proof. […]
October 10th, 2006 at 8:42 pm
[…] Devo ammettere che a me la notizia ha fatto davvero impressione… 1,65 miliardi di dollari qualcosa come 3.000. miliardi di vecchie lire per … comunque pur sempre un sito web nato appena un paio d’anni fa… non innovativo nei servizi ( del resto nato successivamente a google video) e non innovativo tecnologicamente… "solo" + "cool" di servizi analoghi e leader , questo si, incontrastato del settore… Google difficilmente aveva acquisito societ mirando "soltanto" al bacino di utenza e non alle tecnologie (forse l’ultima volta nel 2001 con l’aquisizione di Deja news ) , tali erano state infatti le acquisizioni di Neven Vision, Applied Semantic e Urchin per esempio….. invece stavolta sceglie di investire una parte della propria immensa liquidit in pure "fette" e percentuali di mercato di web advertising … di cui il video promette di diventare presto una nuova frontiera… (proprio in questi giorni gli accordi con fornitori del calibro di SONY BMG, CBS, WARNER e UNIVERSAL… ) e per cui anche cifre che ricordano piu’ facilmente le ns finanziarie (tanto per rimanere sull’attualit) o i dati sui PIL di intere nazioni, sembrano essere comprensibili… (e infatti il mercato premia Google oggi in forte crescita in borsa). Nel leggere la notizia ammetto pero’ che la mia mente andata piu’ volentieri a immaginare i pensieri dei due ragazzi fondatori di you tube (sempre due ragazzi… yahoo, google, you tube .. pare una costante…) e al loro "modello di business" al loro sviluppare un progetto da una idea semplice (e neppure tanto nuova) e cercavo di immaginare un parallelo con la ns situazione italiana…. A parte le ristrettezze del ns mercato "provinciale" rispetto al mondo "internet" , proprio nei giorni scorsi avevo letto dei numeri di You Tube prima della acquisizione … …1 milione di dollari al mese come costi del consumo di banda ( certo a fronte di altrettanti guadagni con l’advertisng) … cosi’ mi sono divertito a immaginare se qualcuna delle mie prossime idee dovesse, sia mai, generare numeri e traffico del genere: - immagino il mio provider : a parte convincerlo a fornirmi una banda del genere, ma come diavolo farebbe a farsela dare in tempi ragionevoli dal ns monopolista telecom? forse butteremmo giu’ l’intera dorsale toscana? … b dubito che avrei potuto mantenere in piedi il progetto… - immagino poi il direttore della mia banca … a cui dovrei spiegare (magari con un bel "bisnes" plan su excel) come quell’allargamento del fido e dello scoperto di conto alla mia ditta per 4/5 milioni di euro sia del tutto ragionevole per mantenere in piedi l’azienda per qualche mese ancora i vista di un valore stimato di 3000 miliardi di vecchie lire… "si, ma Briani che fate nella vs azienda?"… "ma , niente un sito che distribuisce gratuitamente video autoprodotti…" … ma chissa’ magari mi avrebbe fatto direttamente internare…. E va be’… che ci possiamo fare…. forse dovremmo imparare a crecere? Nicola __________________ Hotel a Firenze ?? Operatore Turistico in toscana? Mandami un PVT !italian language schools in Italy […]
October 12th, 2006 at 3:39 am
Nice analysis, and I’ve been reading $100 million. Although I doubt it since only recently has YouTube done much beyond Adsense.
So I agree about profitability. 30 people, $12 million in bandwidth and a loft. But what’s surprising to me is that it would sell at (conservatively) 16 times annual earnings. That’s a fair deal if you project growth but there are three major issues:
1) Google could have done this as well without spending $1.65 billion
2) How long before attorneys decide they’re tired of YoUTube selling ad space around clips from the Daily Show?
3) Will people stay with YouTube when alternatives arrive… alternatives that, for instance, share ad revenue with the LonelyGirl15s of the world?
-K
October 12th, 2006 at 9:35 pm
[…] I usually pontificate over multiple-thousand posts, for those, check these out: YouTube’s potential revenues http://www.watchmojo.com/web/blog/?p=500 Did Google Overpay for FIM’s Search Business? http://www.watchmojo.com/web/blog/?p=317 The Domain Name Ecosystem http://www.watchmojo.com/web/blog/?p=285 How News Corp. Tried to Sue me and Totally Lost http://www.watchmojo.com/web/blog/?p=150 Anyway, I’ll keep this one short: To show you why YouTube totally kicks ass: […]
October 17th, 2006 at 11:14 am
[…] Interesantes 2 artículos sobre Google tras la compra de Youtube. El primero de Enrique Dans de basa en un análisis anterior (en inglés) donde se estudia los posibles ingresos de Youtube a fecha de la compra. Por supuesto los datos son estimaciones y ZDNet no cree que los datos sean correctos (en inglés). Lo realmente interesante es el hecho de que en el mejor de los casos, tal y como se indica en los comentearios del artículo, Google necesitaría, con la mejor estimación de ingresos actuales, 25 años para rentabilizar su inversión. Claro que si la mayoría del precio pagado va en acciones no se nota tanto. En cualquier caso, pierda o gane dinero Youtube el movimiento de Google no creo que haya sido otro más que comerse a la competencia. Igual que en otros tiempos Microsoft deboraba aquello que podía hacerle sombra, Google tiene ahora la capacidad económica de hacerlo. Parece que se olvida el hecho de que Google ya tenía un producto igual. Me gustaría saber que habría pasado, las opiniones si hubiese sido Microsoft el actor principal. En su momento no entendí el odio visceral a Microsoft, y sigo sin entender la adoración a Apple, al Ipod o a Google. El segundo artículo de dirson.com es una reflexión. El título lo dice todo: ¿Se está conviertiendo Google en un monopolio? Es algo que se venía venir desde hace tiempo, la voces críticas empiezan a sonar lentamente. Pero la confianza en Google es fuerte. En el texto se dice ‘Las claves de esta confianza: su imagen juvenil, sencilla, con un logotipo multicolor, unido a una obsesión por parte de sus directivos de primar a los usuarios y su privacidad por delante de cualquier otro aspecto’. Hay una parte en la que puedo estar de acuerdo, la imagen, pero sobre lo de primar los usuarios y su privacidad no disiento. A la mayoría de los usuarios normales les trae al pairo los avisos legales, la mayoría de ellos ni saben que son las cookies o para que sirven, y mucho menos el tracking de sus búsquedas. Dile a cualquiera que su tráfico en internet queda registrado en su ordenador, en su proveedor, en el servidor al que se conecta, en Google, en su webmail y se pasará semanas mirando bajo la cama en busca de un micrófono. Bendita ignorancia. El principal éxito de Google es que es un buscador. Para la mayoría de los usuarios normales Google es un buscador a secas. Entras, escribes lo que quieres encontrar y le das al botón. Buscas y punto. En Yahoo! tenemos cantidad de opciones en su página principal, aunque exista el buscador en la parte superior queda confundida entre tanto icono, noticas y demás. Yahoo! no es un buscador es un portal. Si la página principal de Yahoo! fuese la del search la percepción de los usuarios cambiaría. Supongo que es el fin que se persigue con Live, dejando a MSN como portal. Pero en el caso de Google su simpleza es su fuerza aunque también es una debilidad. Existen muchos otros servicios, algunos como Google Maps o Google Earth son bastante conocidos (Nota: incluso en Crank Veneno en la sangre se puede ver el logotipo de Google en las imágenes aereas). Otros servicios como Analytics o Sitemaps son apreciados por los webmasters. Pero para mantener esa imágen de buscador y no de portal sus productos están sueltos, no hay una integración clara. Tenemos una ‘Google account’ pero existe un acceso para el gmail, otro para el Analytics, otro para Sitemaps, Adsense… Si Google llegase a integrar todos o gran parte de sus productos, se convertirá en un portal y tal vez llegue otro actor (¿Live?)a quitarle el apodo de ‘buscador’. Se basan muchos en el “Don’t be evil” al dar una buena opinión de Google. En Ojo buscador leí esto, da que pensar. Me llama la atención es el hecho que desde Yahoo! Site Explorer se puede acceder a la información precisa de enlaces y páginas indexadas, algo que Google no proporciona. Si lo hiciese, seguramente con una muestra grande se podría sacar una función aproximada para calcular el PageRank. En el presente, y aún más en el futuro, la información es poder y Google la controla, si no estas en las 3 primeras páginas de busqueda no existes. Ya puestos, imaginemos un 1984 donde el ministro de la Verdad se llama Google… […]
October 26th, 2006 at 5:24 pm
[…] - when Google could surpass Microsoft in market captalization here; - what Google could generate from YouTube by adding Ad Sense on the social networking video site here; - what YouTube’s pre-Google acquisition revenues could be here; - what MySpace’s search business was worth to a partner here. […]
October 29th, 2006 at 1:10 pm
[…] Moreover, I was trying to be somewhat conservative in my estimates because when I suggested that YouTube could be generating $7.5 million per month in revenues, people thought my estimates were a bit aggressive when given Google’s $1.65 billion acquisition, they were probably conservative too (also, I do not really need or care about the vindication, but you might have noticed that indeed, nowadays YouTube runs numerous ad networks whereas before, it did not, running one simple ad network and not maximizing its revenue, alas, give 200% of the credit to YouTube for realizing that, but just thought I should, you know, point it out). […]
November 1st, 2006 at 5:49 pm
[…] To see what YouTube can make per month in display ads, click here. To see how little Google can earn with Ad Sense on YouTube, click here. […]
November 2nd, 2006 at 8:24 pm
[…] Since that second exchange, I have exchanged many emails with Mark, mainly on Web strategy and happenings. He’s even read some of my writings and commented on them, which is quite nice in itself, but no word on the Pens. […]
November 10th, 2006 at 11:52 am
[…] Anyway, here goes: when I came across the war of words between Nick Carr and Mike Arrington, I initially did not know who was who. I found out about Nick Carr when he linked to a post I wrote on YouTube or Wikipedia some time ago. I had come across Michael Arrington’s TechCrunch a couple of months ago but had no clue what the site was about or how influential it was. In case you don’t either, Tech Crunch is one of the most influential sites out there and Michael Arrington is the man of the hour in the Web 2.0 blog space. Any single individual who can attract an audience in this cluttered space deserves credit. But that being said… […]
November 11th, 2006 at 3:26 pm
[…] Thanks to this huge and dedicated community, Youtube has been able to sustain itself, and according to some, even earn astounding amounts of money on advertisements alone. […]
December 28th, 2006 at 4:33 pm
[…] The reason that YouTube sucks as a business model is because it currently has so economic system for profit vs. views. It has no monetary reward structure for viral videos (unlike Revver). Therefore, it relies solely on advertising to fuel it’s bandwidth overhead speculated at $1 million per month. (Though, advertisements on the main page alone are believed to bring in $5.2 million dollars of revenue per month) […]