YouTube still does not make any profit Google

Technical observers of the Wall Street Journal, citing informed sources, claim that the Google-based YouTube video service is still at the break-even point. Despite the fact that YouTube’s monthly audience amounts to a billion people and last year it brought about $ 4 billion in revenue, this money barely covered the search giant’s costs of maintaining the site’s work. At the same time, Facebook, with an audience of 1.3 billion people, brought Mark Zuckerberg to the company $ 12 billion in revenue, of which about $ 3 billion was the net profit of the social network.

The fast content delivery network (CDN) and the authors' fee for it are the main expenses of the video service. YouTube supports top video bloggers, providing them, for example, specially built studios YouTube Spaces, which can be used free of charge if the author’s channel is subscribed to by more than 10 thousand people. In total, in 2011, about $ 100 million was spent on supporting the original channels on Google. However, with such an abundance of videos for every taste, YouTube’s advertising revenue accounts for only 6% of the total revenue of the search giant's contextual advertising.

The main reason for this is the ability to embed videos in your own site. They can easily be viewed without having to go to YouTube, where Google can make money from premium ads. In addition, from the entire YouTube audience, only 9% of the video channels provide 85% of views, so there are actually not so many really popular videos. Therefore, such phenomena, which became, for example, the clip «Gangnam Style» with its more than 2 billion views, really quite remarkable.

Google is trying to fix the situation. Among the possible options for the development of the service is the introduction of a paid subscription , which will allow you to watch videos without annoying ads for a certain monthly fee. In the meantime, Twitter allowed to publish videos shot using a mobile application, and startups like Vessel enter into legal battles with Google for the right to exclusively publish videos of top bloggers, bypassing YouTube.
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The search giant acquired YouTube for $ 1.65 billion in October 2006. The company is run by Susan Vodzhiski, whose older sister Ann Vodzhiski was married to Sergey Brin, one of the founders of Google. According to the official legend, the future company was born in the garage of the Vojiska sisters.