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Google Losing Up To $1.65M a Day On YouTube 290

Posted by timothy
from the lancelot-galahad-and-I-Jump-out-of-the-rabbit dept.
An anonymous reader writes "The average visitor to YouTube is costing Google between one and two dollars, according to new research that shows Google losing up to $1.65 million per day on the video site. More than two years after Google acquired YouTube, income from premium offers and other revenue generators don't offset YouTube's expenses of content acquisition, bandwidth, and storage. YouTube is expected to serve 75 billion video streams to 375 million unique visitors in 2009, costing Google up to $2,064,054 a day, or $753 million annualized. Revenue projections for YouTube fall between $90 million and $240 million." Maybe this is in part because, as Al writes, "Researchers from HP Palo Alto studied videos uploaded to YouTube and found that popularity has little to do with quality or persistence."
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Google Losing Up To $1.65M a Day On YouTube

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  • REALLY now? (Score:4, Funny)

    by courseofhumanevents (1168415) on Tuesday April 14, 2009 @11:55AM (#27572633)
    "Researchers from HP Palo Alto studied videos uploaded to YouTube and found that popularity has little to do with quality or persistence." Let me be the first to say "I told you so."
    • Re:REALLY now? (Score:4, Informative)

      by Ethanol-fueled (1125189) * on Tuesday April 14, 2009 @12:02PM (#27572753) Homepage Journal
      Youtube is failing because all of the stuff worth watching was coincidentally all the stuff they removed for DMCA-related reasons.

      On top of that, the few videos that I like that they didn't remove are much harder to find using the new search system. When I youtube, I'm looking for something specific and I don't want to have to wade through hundreds of teenagers' insignificant opinions, cretinous hammy behavior, or unimaginative video collages.

      The "you" in Youtube will be the death of it.
      • And I think The Onion [theonion.com] said it all.
      • Re:REALLY now? (Score:5, Insightful)

        by Opportunist (166417) on Tuesday April 14, 2009 @12:15PM (#27573007)

        Youtube is failing because all of the stuff worth watching was coincidentally all the stuff they removed for DMCA-related reasons.

        And how exactly did they generate revenue before the DMCA takedowns?

      • Re:REALLY now? (Score:5, Insightful)

        by frieko (855745) on Tuesday April 14, 2009 @12:35PM (#27573341)
        But is Youtube actually failing? Or is $2m a day money well spent when it comes to keeping the word 'Google' on the tip of everybody's tongue? /thinkingoutloud
      • Re:REALLY now? (Score:5, Insightful)

        by Idiomatick (976696) on Tuesday April 14, 2009 @12:35PM (#27573351)
        Well. I agree that the DMCA BS is terrible. But I don't think that has any bearing on their profit margin. If they are losing money per view... DMCA is probably saving them money by slowly killing youtube. I understand your aggression but clearly it is misdirected.
      • Re:REALLY now? (Score:5, Interesting)

        by AmiMoJo (196126) <mojo@NOspAm.world3.net> on Tuesday April 14, 2009 @12:45PM (#27573519) Homepage

        Youtube isn't failing at all. It has become the number one video site.

        Sure, it is loosing money today. But tomorrow, bandwidth and storage will be cheaper, and Youtube will still be number one. They got in early and conquered the market.

      • by hellfire (86129) <deviladv@@@gmail...com> on Tuesday April 14, 2009 @12:46PM (#27573549) Homepage

        So stuff that a big huge corporation put together and protects with draconian copywrite a DMCA is only worth it? Individuals can't come up with good ideas and offer them for free?

        Here are 2 examples that completely blow that out of the water:

        http://www.youtube.com/user/davidspates [youtube.com]
        http://www.youtube.com/user/Peacer [youtube.com]

        And the second guy recently got a job with some major media group because of the talent he showed on youtube!

        Here's another example, but it may not be to everyone's entertainment tastes but you can't dispute the quality of the actual animation is great:

        http://www.youtube.com/user/MondoMedia [youtube.com]

        And here's some "big media" content actually provided without those draconian restrictions:

        http://www.youtube.com/user/BritainsSoTalented [youtube.com]
        http://www.youtube.com/user/JanisDigitalMedia [youtube.com]

        The first one is the most subscribed channel on youtube. The second is content for a local radio station in philly. I find both of these sub par compared to the previous links, but hey people want to subscribe to them, and the owners must be leveraging some kind of success out of them.

        So I directly challenge that the assertion that the only good stuff on youtube is the stuff taken down by DMCA. I think the only stuff you ever bothered to look for was stuff you already saw on TV.

        Oh... and did you forget the Monty Python channel? If you don't think that's worth it, then I demand Taco ban your IP immediately for proclaiming such heresy!

        • Re: (Score:3, Informative)

          by lennier (44736)

          "So stuff that a big huge corporation put together and protects with draconian copywrite a DMCA is only worth it?"

          Dear Sir/Madam:

          CopyRIGHT.

          Your licence to hold an opinion about a legal concept you don't even know how to spell is hereby _revoked_.

          After the mandatory 21-day stand-down period you may reapply for said licence at your local City Council service centre, in the usual manner, ie, on the unlighted fifth sub-basement floor in the disused lavatory marked with the sign 'Beware of the Leopard', etc, etc

      • Re: (Score:3, Insightful)

        by dedazo (737510)

        Also, one of the reasons I've stopped using YouTube other than the occasional linked-from-some-other-website-or-email visit is the fact that they fucked up the favorites functionality. You used to be able to simply page through your list of favs, adding them to your quick list by simply clicking on the '+' widget on the video snapshot, but now you have to make a selection and then scroll back up and click on a button that then shows a dropdown menu. Then on to the next page. This loss of usability is comple

      • Re: (Score:2, Interesting)

        by Anonymous Coward

        Bullshit.

        Granted, there is a lot of "noise" to filter out on youtube because of the people who use it as a video journal or blog. But I think the home-made stuff is what is appealing. The DMCA-protected copyright owners can pay for their own video hosting for all I care.

        I go to youtube to see videos of people's RC car mods or other such DIY crap, not commercial videos.

    • by eldavojohn (898314) * <eldavojohn AT gmail DOT com> on Tuesday April 14, 2009 @12:02PM (#27572763) Journal

      "Researchers from HP Palo Alto studied videos uploaded to YouTube and found that popularity has little to do with quality or persistence." Let me be the first to say "I told you so."

      The researchers found some very useful information though--like the fact that a man getting kicked in the testicles is just as funny or maybe even more funny in grainy home video than in high definition. After performing principal component analysis on several testicle injury clips rated across thousands of users, they found--surprisingly--that the most important variables are (1) how wide the victim's eyes opened upon impact, (2) how loud of a scream the victim emitted upon impact and (3) how long the victim lay motionless on the ground after initial agony.

    • That was my first thought, too.

      Just as the majority seem to have an appetite for garbage television, and garbage music, they also have an appetite for garbage Youtube videos.

      Yes, I'm being pompous, condescending and arrogant. Got a problem with it?

  • by eldavojohn (898314) * <eldavojohn AT gmail DOT com> on Tuesday April 14, 2009 @11:55AM (#27572637) Journal

    Content Acquisition - $710,000
    Revenue Sharing - $66,000
    Administrative Costs - $252,000

    I might be able to see the bandwidth costing a million dollars a day but could someone explain how Credit Suisse and comScore came up with these numbers?

    • by idontgno (624372) on Tuesday April 14, 2009 @12:16PM (#27573021) Journal
      I suspect it's the unholy fusion of accounting and proctology.
    • Re: (Score:3, Insightful)

      by jamromhem (1532397)
      Well on top of bandwidth you have to consider the cost of thervers and the personnel to manage them. hard drive failures. Backups. technicians. But to think that they would lose anything by letting people place videos (for Free) and let people watch them (For Free) is crazy. we all know a website with countless storage cost almost nothing. (not serious)
  • Yeah, but (Score:4, Funny)

    by slagheap (734182) on Tuesday April 14, 2009 @11:59AM (#27572701)
    they're making it up in volume.
  • by BadAnalogyGuy (945258) <BadAnalogyGuy@gmail.com> on Tuesday April 14, 2009 @11:59AM (#27572717)

    While much has been made of Google's amazing ability to make money with online advertisements, the cracks in the dike are beginning to leak.

    Youtube is only the first domino in Google's house of cards. As Google increases server-side requirements to support their growing portfolio of online products, they will reach a point where advertising simply won't be profitable anymore. Youtube with its heavy server-side requirements (even running on lighttpd!) just isn't cost effective considering the number of pages they need to serve and the direct links to media they provide.

    As someone who likes services that are free, I will mourn the loss of advertiser-paid services, but in terms of the viability of the web this day was inevitable.

    • by shadow349 (1034412) on Tuesday April 14, 2009 @12:01PM (#27572751)

      Youtube is only the first domino in Google's house of cards.

      Checkmate.

      • Re: (Score:3, Funny)

        by Anonymous Coward

        Youtube is only the first domino in Google's house of cards.

        Checkmate.

        Maybe he should change his name from BadAnalogyGuy to MixedMetaphorGuy?

        Bingo.

      • Re: (Score:2, Informative)

        by DrJohnnie (93092)
        Obligatory Zapp Brannigan (Futurama) quote... "If we hit that bull's eye, the rest of the dominoes will fall like a house of cards. Checkmate."
      • I'll see your checkmate and raise you a yahtzee.

      • Snap!

      • Don't make fun of him, BadAnalogyGuy is just trying to stay in character!
      • Youtube is only the first domino in Google's house of cards.

        Checkmate.

        You sunk my battleship! Pretty sneaky, sis.

    • Google builds card houses out of dominos?

      How the heck does that work?

    • It's just taking a while because we're emotionally attached to things like paper news [shirky.com].

      But it's a process and the over-valuation of old media models are upheld by vested interests. Our current cable networks add nothing to the mix except for the occasional cornerscreen logo.

      Ten years ago there would be no way to identify and fund popular content without cable companies. In ten years time there will be very few, if any, cable companies left - with virtually all production funded from web advertising revenue.

      G

    • by Repossessed (1117929) on Tuesday April 14, 2009 @12:34PM (#27573329)

      I would point out that Microsoft has lasted for decades with huge money draining projects, on a few heavily profitable ones.

    • The end of the advertisement based internet, prediction #102212211. Allow me to file it with all the other IT predictions, I had a heavy lunch so need to go to the filing room anyway.

    • by digitalgiblet (530309) on Tuesday April 14, 2009 @01:07PM (#27573977) Homepage Journal

      I'm more optimistic about the survival of something like Hulu. They have ads you cannot skip, but they usually have FEWER ads than the same show when broadcast.

      We are still in the early stages of figuring out how business models will work in the Internet world.

      The cost of distributing content has fallen so dramatically that it is practically zero (or gets closer each day), but although the cost to produce content has fallen, it has not fallen by the same orders of magnitude.

      As a generalization I'd say most Internet users prefer something free to something with a cost of a fraction of a cent IF the free item is perceived to have at least 25% of the quality of the non-free item.

      Quite a conundrum. You can't spend millions of dollars to produce something that will not yield more than you spent. The puzzle is how to get someone to pay (consumer? advertiser? government? alien illuminati?)

    • by CopaceticOpus (965603) on Tuesday April 14, 2009 @01:18PM (#27574151)

      Time is on Google's side. Look ten years down the road. Hosting costs and bandwidth costs will be greatly reduced, as is the trend. (Think how far web technology has come since 1999.) Advertising models will have matured, and YouTube will have profitable deals with specific content providers.

      The most important thing to have is users. People use Google for searches because it is familiar and it is a habit. The same is now true for videos and YouTube. Despite the fact that other video sites exist, most people think of YouTube by default. Google is willing to lose money now in order to encourage this habit, so that when it does become profitable they will be in prime position.

  • by TibbonZero (571809) <TibbonNO@SPAMgmail.com> on Tuesday April 14, 2009 @12:03PM (#27572767) Homepage Journal
    Content Acquisition - $710,000
    Revenue Sharing - $66,000
    Administrative Costs - $252,000
    Being the number 1 video site on the internet.... Priceless
    • by Jack9 (11421)

      The reach the site gives in terms of marking and tracking people's interests is not priceless, but it's in the multi-billion dollar range. Half a billion loss for that, for a net gain, is not even worrisome to google.

  • it is worth it (Score:4, Interesting)

    by acidrain (35064) on Tuesday April 14, 2009 @12:04PM (#27572793)
    YouTube positions Google to try and be the next iTunes, to turn Android into the next iPhone and be the place where video and audio providers need to be to sell their content. I'm sure Google knows this and considering the economic realities of the day are looking at ways to move in on Apple. I mean really, why else would they be burning that much money folks. There has to be more of a plan when it comes to Google and media than to spend 5 billion waiting for bandwidth to become cheaper.
    • Re:it is worth it (Score:5, Informative)

      by ClosedSource (238333) on Tuesday April 14, 2009 @12:10PM (#27572901)

      Isn't the simplest answer the Google made a mistake? They originally came up with a novel way to do search and have made a ton of money off of it. It doesn't mean that everything they do is genius.

      • by acidrain (35064)
        I'm not asking for genius. I'm just saying they have to have a plan beyond puring money into a hole or they wouldn't be doing it. And it seems pretty obvious what plan you would have with a site like YouTube.
      • Re:it is worth it (Score:4, Interesting)

        by h3llfish (663057) on Tuesday April 14, 2009 @02:23PM (#27575271)
        The whole thing reminds me of Yahoo's acquisition of broadcast.com. In 2001 (or so) Yahoo figured that the world was very nearly ready to get all of their video online, and that someone was going to get astonishingly rich providing it to them.

        Of course, most observers now think that Yahoo flushed a massive amount of dough down the drain. Even today, no one is making huge dough selling video online, although several companies are still trying.

        Years later, Google repeats the error. In fact, Google is repeating several of Yahoo's errors, and I expect will share a similar fate: rapidly decreasing relevancy, but enough strong core businesses to keep chugging along, hoping to stumble into a new cash cow.

        If a company has a huge pile of money, they can keep throwing darts at a board until they hit the domino, and the whole house of cards tumbles... Checkmate!
  • You can't count revenue you never had as lost money. Google is losing the potential income of $1.65 million a day. If they were actually losing that much a day, they'd be out of business soon.
    • Or, I could misread the summary and post something completely incorrect...and the simple fact we can't edit or remove erroneous posts is what makes slashdot one of the worst public forums on the net (ironically).
      • No, I think it ads a touch of spice. Its like writing a math test in ink, or typing, before correction tape. You better think about what you're going to say before you do, cause you can't change it.
        • The problem is I DID think about what I wrote, and I even previewed. The problem was I missed a key word in the summary. For example, The sky is green! I write in and say, no you stupid gits, the sky is blue, only to see the summary said the sky in not green. So thinking be damned!
      • by timster (32400)

        Editing/removing posts is lame. Don't be in such a hurry.

    • by LatencyKills (1213908) on Tuesday April 14, 2009 @12:27PM (#27573187)
      No they wouldn't. Google has an estimated $15.85B cash on hand, at least as of Dec 31, 2008. (http://finance.yahoo.com/q/ks?s=Goog [yahoo.com]) At a rate of $2M a day, they have enough cash to last them more than 21 years, and that's if they don't bring in a single dollar in the meantime.
  • by siriuskase (679431) on Tuesday April 14, 2009 @12:05PM (#27572811) Homepage Journal

    I'm not sure exactly how. But, it is a completely different business model, and I'm not sure anyone has it figured out yet. I am grateful for the Googles of the world whoe enter these ventures without much thought to the compenssations, but I do wish them luck. I want youtube to stay around.

    • by ghjm (8918) on Tuesday April 14, 2009 @01:00PM (#27573843) Homepage

      I'm not sure exactly how. But, it is a completely different set of ballistics, and I'm not sure anyone has it figured out yet. I am grateful for those of the world who are shot from a cannon without much thought to the results, but I do wish them luck. I hope they don't go splat like everyone else who's tried it.

      (Also, isn't "web economics are different" a Web 1.0 statement?)

      -Graham

  • are likely calculated as loss based on the potential for gains or sales...which is a calculation that is mostly speculation and
    often used by businesses to inflate their urgency during an outage (ex: losing 1 billion dollars an hour.)

    • these numbers are likely calculated as loss based on the potential for gains or sales

      No, if you read TFA, they are clearly based on guesses as to the total revenues of YouTube (which range over a huge area) and estimates of its total actual operational costs (which, while also based on all kinds of assumptions, are pretty close between the Credit Suisse and Bear Stearns estimates, unlike the revenue numbers.)

      So its an guesstimate of the actual operating profit/loss, not loss based on the potential for gains

  • Money drains (Score:3, Insightful)

    by Animats (122034) on Tuesday April 14, 2009 @12:12PM (#27572933) Homepage

    Google has a fundamental problem: except for search ads, nothing they do makes money. Google has already dumped a few money-losing services, and they may well dump more of them. Even the few non-ad products that bring in revenue, like the Google Search Appliance and the corporate version of GMail, aren't very successful. Google stock is down 50% from the peak in 2007, and most of that decline came before the recession. Investors are getting annoyed at the money draining products.

    I wouldn't be surprised if Google dumps YouTube and starts charging for GMail.

    • Re: (Score:3, Insightful)

      by rolfwind (528248)

      Google has a fundamental problem: except for search ads, nothing they do makes money.

      That's a stupid way of looking at it. They are my central hub. Everything they do is gear toward information gather and making more money. Google maps? They know the spots I drive to with a simple search, I get directions in return. What benefit is that to them? More targeted ads, and selling info if they so choose.

      Google has already dumped a few money-losing services, and they may well dump more of them.

      May as well ki

      • by jez9999 (618189)

        They also should work on ads, no longer than 10-15 seconds

        Cue whinging Slashdotters about how the 'net wasn't designed for ads and how they should and will find a way to get around them in 3... 2... 1...

  • by geekmux (1040042) on Tuesday April 14, 2009 @12:15PM (#27573005)

    C'mon, are the quality and popularity statistics really that surprising when the average YouTube video is uploaded with a cheap webcam and recorded by someone who makes Paris Hilton look like Einstein?

    I believe a famous dog once said "I leave more personality in tightly coiled piles on the lawn."

  • Huh. (Score:5, Funny)

    by cthrall (19889) on Tuesday April 14, 2009 @12:18PM (#27573051) Homepage

    Researchers from HP Palo Alto studied videos uploaded to YouTube

    I see I'm not the only one who gets paid to do this.

  • YouTube is like the web from 90ies... Everybody's dog was on there..
    Try to find a music video? Well, you'll get 4000 videos dealing with viagra, terrorists, preteen girls, some dopey dudes and everything else EXCEPT for the video you were looking for.
    I know that goog may not have the rights to the aforementioned music video, but it's fscking misleading and a waste of my time.

    I know that there is some good stuff out there and there is a good idea behind it, but navigating through the crap, poorly edited, and

  • "The average visitor to YouTube is costing Google between one and two dollars, according to new research that shows Google losing up to $1.65 million per day on the video site."

    Er, no.

    That's not research, its almost pure guesswork. The key part being the guesses as to revenue. The two different estimates (from Credit Suisse and Bear Stearns) come pretty close on total daily cost ($2,064,054 vs. $1,906,520), but they are differ by a huge amount in the estimates of daily revenues ($657,534 vs. $246,575) so th

  • How do you estimate strategic assets? How to estimate the value of "offering everything"? How much is it worth to put the thumb screws on every media company? Everybody goes to google video/youtube for seaching videos - if you are not mentioned, forget your business. I usually stay on youtube becaus i hate to add more and more noscript exceptions and because i know that it works. Would google introduce pay per view for movies, i would immediatly pay 20Euro/Month - if they keep it as trouble free as it is no
  • Honestly, looking at Google's repertoire of products, most of them don't make money. Only the advertising seems to.

    Which is as long as Google can stay on top as search engine king, they can fund these unprofitable pieces of software, be it Chrome, or Gears, or Docs, or whatever... but if they slip in ad revenue, or they have a couple of shitty quarters, I can see some big trouble for Google.

    Say what you will about MS, but they have profit centers throughout the company, and have a hoard of cash to boot. Not

    • Call me crazy, but I think the *last* thing we need is another MS wannabe.

      As it stands, I can get all my contacts easily in/out of Gmail, forward my email to other providers, save Google Docs in multiple open and closed formats that work in non-google software, and many other things that MS would have denied in an effort to kill off competitors.
    • What are the Microsoft profit centers?

      Other than:

      Windows
      Office
      Exchange
      MSSQL Server
      Input Peripherals

      I would bet they have even more losers.

  • Let me try (Score:2, Funny)

    by Zarf (5735)

    I would just need that amount for a few days. I'm sure I could turn it all around. Just deposit that amount in my offshore bank account as my salary. If it doesn't work... you won't be out any more than usual. Why not give me a try?

  • a lot of people went to youtube to find eps of TV shows. Combine the takedowns with hulu, and that's got to be responsible for a lot of their lost revenue.

  • The average visitor to YouTube is costing Google between one and two dollars

    No problem, they'll make it up in volume :-)

  • "Researchers from HP Palo Alto studied videos uploaded to YouTube and found that popularity has little to do with quality or persistence

    No shit sherlock. What next? Water is wet? Come one, anyone who know even just a tiny of pop culture knows that is not about quality, it has never been. Come one, hasn't this people been to school? From childhood we are taught that "quality" and "knowledge" are to be shunned, and "cools", "looks" and dumb acts should be praised.

  • by thePowerOfGrayskull (905905) <marc,paradise&gmail,com> on Tuesday April 14, 2009 @12:42PM (#27573453) Homepage Journal

    Let me relay a little dialog in which I learned the REAL revenue model of youtube. I got this mysterious call just a few days ago.

    Me: Hello
    Them: Mr or Ms Skull?
    Me: Yes, may I help you?
    Them: You remember that ... embarrassing video you posted to youtube a couple of years back?
    Me: Um... yes?
    Them: You know you gave us-- I mean, google ownership of it.
    Me: I ... guess so?
    Them: Yes. We have noticed that you have been searching for jobs lately.
    Me: who is this?
    Them: And we see from your email that you've been speaking with Innitech in particular.
    Me: if you don't tell me-
    Them: And we also see that you mapped out directions to their headquarters.
    Me: I'm going to hang -
    Them: If you don't want Innitech to find this video before hiring you, you will wire 1,000,000 USD to the following numbered account

  • I wonder if there is a connection to the massive job openings posted by Microsoft in China. The only requirement is as following: "Ability to hit refresh-button on an internet browser."
  • HP Palo Alto researcher's reaction to 2girls1cup is top 1 video in youtube.
  • by GreatBunzinni (642500) on Tuesday April 14, 2009 @12:47PM (#27573577)

    There is no other organization in the world that cares more about Google's expenses than Google. If Google was in fact drowning itself in expenses that it couldn't possibly recoup then it would never implemented youtube's support for high definition clips [youtube.com]. I mean, why would they implement a feature that in the end is nothing more than implementing the exact same service while spending about 4 times the bandwidth?

    Moreover, it's somewhat amusing how someone can proudly claim that someone is spending millions while at the same time confessing that it is basing his calculations on absolutely zero hard facts or figures. They don't know how much google earns from youtube, they don't even know the order of magnitude Google's bandwidth expense is in. Yet, they try to calculate things.

    It starts to get really silly when their calculations, based on nothing more than whims and assumptions taken out of thin air, are presented as $1,406,720 or $1,659,945. That means that they present a result which is the fruit of pure imagination in the form of a number with 7 significant digits. I can't measure anything with that kind of exactness even if I'm holding it in my very hands. Impressive.

    To sum things up, nothing to see here.

  • Someday... I gave up speculating when... Internet 2 may revive the concept of the MBONE. YouTube is the end result of killing multicast. Yes, sometimes I want to see home made videos of cats flushing toilets. Yes, I know it has no social value.

    A central hosting model will NOT work. Only a distributed one will. And it should support LIVE one-to-many scaling. The END USER should pay for this. If my garage band hits it big, I should be able to push a medium bit rate H.264 stream into the grid, and the grid
    • by Jonner (189691)

      Don't forget to pay the royalty for each copy of your H.264 someone downloads, regardless of the method. The end user won't be paying for that.

  • by wickerprints (1094741) on Tuesday April 14, 2009 @12:56PM (#27573787)

    Google's strategy is not simply about creating or acquiring ubiquitous online services regardless of profitability. A lot of comments so far have missed the forest for the trees. You want to know why Google beats its competitors in advertising? It's not just brand presence or market domination. It's the way in which they cross-analyze data collected from ALL their services in order to increase the accuracy of their advertising.

    I mean, hasn't anyone noticed this yet? Your GMail, Blogger, Calendar, Picasa, and YouTube accounts are all linked. Even the original search that Google started out with provides valuable analytics that are still trade secrets. Users of these services leave a data trail that provides Google with all kinds of information about the user's preferences. That information then gets analyzed and targeted ads are served that increase the likelihood that they'll be clicked. And that's how Google gets the business. Their biggest fear is not whether a product is losing money; it is that nobody is using it and therefore there is no data to mine. All these serivces are just carrots they dangle for the end-user. Their true customers are those who pay for the data they collect from us.

    One service does not have to turn a direct profit in order to increase the value of the overall business model.

    • Google's strategy is not simply about creating or acquiring ubiquitous online services regardless of profitability.

      It's not clear that Google even has a strategy.

      Their biggest fear is not whether a product is losing money; it is that nobody is using it and therefore there is no data to mine. All these serivces are just carrots they dangle for the end-user. Their true customers are those who pay for the data they collect from us.

      Is such income listed in their financials? (Last time I looked,

  • Google isn't losing money on YouTube. They're investing.

    People forget that Google isn't about advertising, or search, or webmail. They're not about video content or data farms or VoIP.

    Google is about one thing: data harvesting. Google is doing a fine job at that. We all know that cable, satellite and broadcast methods of transmitting video and audio are dying. There's no future in doing things through unidirectional multicast. Entering the cable business can cost hundreds of millions of dollars to sta

  • Google Losing Up To $1.65M a Day On YouTube

    . . . yeah, but they'll make up for it in volume! ;)

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