Youtube is already profitable: 350 million euros in advertising
When Google bought YouTube in 2006 the young Chad Hurley and Steve Chen, doubts arose about the profitability of this business model. After four years, the answer appears to be positive, since analysts estimate that the video portal will come in green numbers in 2011, entering 350 million euros in advertising.
Although Google has never made public the income of Youtube, it has revealed that they had been doubling annually in the last three years. Now, with the number expected this year, the site would reach the desired yield and the secret of this success may be in advertisements.
One and a half ago, Google CEO Eric Schmidt planned a change in strategy was going to “amass an audience first, and then capitalize with new tools,” steering himself confessed in an interview, as it takes’ Portaltic ” The New York Times.
Thus, the advertisements included advertisements in the videos and sharing revenue with the owners of rights was one of the first steps in this direction that, ultimately, have been key to launch the business.
In fact, today on YouTube more than a third of the 2,000 million weekly visits to videos with ads correspond to this model – ‘clips’ uploaded by users without copyright but with the permission of the owner -.
‘MAD MEN’ AND EMINEM
This shift has allowed Google – whose ad revenue in the text searches account for 90% of the total – to improve relations with the owners of rights, especially with producers and distributors. A good example of Lions Gate, responsible for the series ‘Mad Men’, a favorite for users to judge by the number of videos.
“Years ago, our meetings with these companies were filled with lawyers and marketing managers were sitting in a corner. Now when you go to a meeting and there are lawyers just try to work hand in hand”, summed up the director of shared content Youtube, Chris Maxcy.
The measures also reach videoclips, which even uses the redirect to other sites where you can buy songs or albums such as rapper Eminem’s single ‘Not Afraid’.
These benefits thus become a good news for Google, which paid U.S. $ 1,650 million (1,285 million euros) for the purchase of video portal.
Source: www.portaltic.es
