
According to financial firm Credit Suisse and Internet measurement provider comScore Inc. , YouTube Inc. is on track to serve 75 billion video streams to 375 million unique visitors in 2009.
That's the good news. The bad? To support those visitors, Google (Nasdaq: GOOG) will spend more than $2 million dollars daily -- to be exact, up to $2,064,054 a day, or $753 million annualized, according to Internet Evolution calculations of YouTube's costs derived from a range of sources, including Bear Stearns & Co. Inc. , comScore, Credit Suisse, and Google itself.
Now, Google does not disclose sales figures by division, so there is no definitive revenue number for YouTube. The range of estimates from financial analysts stretches from a low of $90 million (Bear Stearns) to a high of $240 million (Credit Suisse).
All the numbers are well below the estimated maximum of $753 million Google is spending annually, based on our calculations. So, depending on whose version of revenues you accept, Google is losing anywhere from $513 million to $663 million annually on YouTube, or anywhere from $1.4 million to as much as $1.65 million every day (see chart below).
Let's make it personal: The average visitor to YouTube costs Google more than a dollar ($513 million to $663 million in estimated losses divided by 375 million unique visitors).
In effect, Google is paying you to enjoy YouTube videos. In return, it gets the chance to show you some advertising. But adoption of those big-ticket items (YouTube sells homepage roadblock ads at $175,000 per day and branded channels at $200,000 apiece) has been limited, and Google AdWords image advertising remains the primary revenue source for YouTube.
A YouTube spokesman declined to comment on these figures or any conclusions of this blog.
Meanwhile, to deliver YouTube, Google is bleeding money in the following areas...
Now take this economy, in which advertising revenues are declining while all of YouTube's costs are increasing. The forecast is only that Google will start losing more money per day.
On the lighter side, you have to give Google credit for losing money with class! The first participant in its recent "Call to Action" for nonprofit partners raised over $10,000 in one day from a video. Classy of Google, yes. It might also be a tax write-off against its monstrous losses from YouTube.
Source: Internet Evolution
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