YouTube May Soon Become Profitable
July 16, 2009 by Mark Ellis
Filed under Business
Google purchased YouTube for $1.65 billion in 2006, but the internet search giant has struggled with its attempts to turn the mega-popular video-sharing website profitable. However, Google CFO Patrick Pichette stated today that he expects YouTube to finally bring in a profit despite overwhelming analyst opinions echoing the contrary.
YouTube has experienced a surge in branded advertisements as more and more advertisers opt to run their ads alongside related videos. Google credits this trend to YouTube’s growing prominence as a home page for consumers, its massive popularity, and its relevance to the younger generation, one of advertisement’s favored targets.
Analysts like Spencer Wang of CreditSuisse have predicted that YouTube would still cause losses for Google, Wang predicting that YouTube would incur $470 million worth of losses. Google has stated that it has fine tuned what kind of advertisements it would run and where on the website they would be most appropriate to run in order to get the best results, hopefully boosting YouTube’s profits.
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