YouTube has to be one of the most successful social networking sites of our time. The media hub was founded by three former PayPal employees. The site was officially launched in November 2005, it grew at tremendous speeds and around 8 months later YouTube announced that they were getting around sixty thousand new videos put on the site on a daily basis. Besides that the site was getting around 100 million page views every single day.
In November 2006 Google Inc decided to buy the site for $1.65 billion. The site has grown and expanded a lot more since that time, which leads us to the question of how much profit is YouTube actually making?
Although Google as a whole company are making a massive profit, there is no real insight into how much YouTube as an independent entity is making. Rumours have stated that the site costs around $1 million a day in bandwidth costs. Experts have actually indicated that the site could be on course to actually make a loss of $470 million this year. Which is a huge amount and people are questioning how long Google can withstand this, even with the $16 or so billion that they have accumulated into the bank.
But in my personal opinion people are not seeing the bigger picture. Google is a search company, their primary focus is search, so any sites or businesses they buy, they buy them too actually improve their overall search results. So in some ways you can't really count YouTube as an independent business model, because what it has done is make Google's primary earner a lot stronger and better. Because Google are now integrating YouTube videos into searches that are made on their engine.
YouTube was always bound to make a loss in the end, I mean look at how many videos and users are accessing the site on a daily basis, it is going to cost them a fortune in server costs. If any one else purchased the site then YouTube may have no longer existed, but the benefits that they are getting from integrating it into the search results is enough.
I am certain that the company will find a way to monetise the site if they really need to in the future, I believe that companies that are after excess royalty payments from the site are wrong to ask for so much, because YouTube is in fact giving artists more free brand name exposure, and by removing the content the record labels could be missing out themselves.
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