Sunday, April 05, 2009
Why YouTube may lose $470 million this year
According to a Credit Suisse analyst, YouTube will lose $470 million in 2009 because it sells advertising on less than 3 % of its web pages.
'Weakness' at YouTube led the analyst to cut his 2009 profit estimate for Google to $4.68 a share from $4.83. (YouTube set to lose $470M; most ad spots going unsold )
In 2006, Google bought YouTube for $1.65 billion.
YouTube has a giant audience because of its home made videos and clips from films and TV shows.
Arash Amel, analyst for researcher Screen Digest, estimates that YouTube attracts 89.5 million visitors per month.
Amel estimates that, in 2008, YouTube generated $114 million in U.S. revenue but had no gross profit.
Amel reckons that only 3 to 4 percent of the videos on YouTube carry advertising. (Online Video Race.)
This is Google's problem!
Perceptive YouTube users know that the adverts are on the wrong videos.
You look at excellent and popular videos about Monet or Mauritius or Mahler, and the chances are they will have no adverts.
A video on Mahler could well attract adverts for posh cars or fine wines or expensive holidays.
You come across a video which has had few views, and mysteriously it has adverts.
The same applies to blogs and other media sites.
The Google adverts are often on the wrong sites.
Google AdSense does not seem to want adverts on the more enlightened and intelligent web pages.
The Financial Times, unlike many of its competitors, has been doing well because it has some intelligent content.
Media Cache Internet Ads Say Goodbye to Glory Days
YouTube set to lose $470M; most ad spots going unsold