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YouTube, Finally Adding Up to Something?
by Kevin Maney
Oct 08, 2008
Oct 08, 2008
Kevin Maney writes: Ever since the early dot-com days, there's been an underlying belief in tech circles that building an audience -- getting eyeballs, as they like to say -- would eventually lead to revenue and profits. YouTube, Facebook, Meebo, Twitter -- they all started with no brilliant plan for making money. The sites are free, and the idea has always been to get millions of people to go there, and then surely advertisers would want to be there, too.
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But it hasn't really worked out that way. YouTube has had one of the biggest audiences on the Web the past couple of years, yet no way to really make money on ads. Facebook is still struggling to find a revenue model. Twitter is one of the hottest things going, but how the heck is that going to make money?
This is why everyone is going to closely watch Google's new push with YouTube. The video site will now add buttons for selling stuff through Amazon.com and iTunes, and is experimenting with ads inserted in videos. In a sense, it's throwing every trick but the kitchen sink into YouTube to try to get it to pay off. Google bought YouTube in 2006 for $1.6 billion, and it probably won't contribute any more than about 1% of Google's revenues this year.
So it will be interesting to see if Google can turn eyeballs into money, especially in a down economy. It will say a lot about the fate of other eyeball-laden but revenue-hungry Web companies.
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