September 4, 2010

YouTube Expected To Reach Profitability

YouTube is expected to make a profit this year with revenue that has more than doubled each year for the last three years, The New York Times reported on Friday.

The Google-owned video-sharing site is expected to earn revenue of 450 million dollars this year, most likely because of the rise in advertising found on YouTube. Although Google doesn't release figures for YouTube, which it bought for 1.65 billion dollars in 2006, senior executives have suggested recently that it is near profitability.

The newspaper reported that anonymous analysts said this would be the year that YouTube will turn the corner and start making money.

YouTube has been slowly adding new content to its popular video-sharing site, including full-length TV shows and feature films to its vast sea of amateur videos in an attempt to attract more advertising dollars.

"YouTube is a big component of our display (advertising) revenue, and display is our next big business," Google chief executive Eric Schmidt said in an interview with The New York Times.

Schmidt said he asked YouTube's management team about 18 months ago to start focusing on revenue. He said the strategy had been to amass "an audience first, then figure out the tools that will create the revenue."

There is talk of YouTube being in negotiations with Hollywood film studios to launch a global pay-per-view video service by the end of 2010.

The service would stream videos rather than have viewers download them and newer movies would cost about five dollars. New movies would also be available at the same time as their release on DVD, according to Britain's Financial Times.


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