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Bear Sterns: YouTube Took in $15M in 2006
An article in the San Francisco Chronicle talks about the way that Google and YouTube have been quietly working to make the online video site live up to its promise despite all of the legal hurdles and roadblocks set up by major media companies. It notes that, with the Bear Sterns report, Google paid over 100 times earnings for the video site.
Bear Sterns: YouTube Took in $15M in 2006
The article quotes YouTube's business development chief Chris
Maxcy as saying that the company was committed to the idea that it would be fully supported by video advertising, but analysts say that it will need professionally produced content on the site (like that of Viacom that was recently removed) to really attract advertisers.
For the company to make money from advertising -- and the potential is huge, with an estimated $70 billion to $80 billion spent in television advertising -- Google and YouTube need the premium videos. Because viewers are more likely to watch these clips than myriad user-generated ones, advertisers are willing to pay more for them.
"You will not make money advertising against a Lonelygirl15," McQuivey said, referring to the faux teenage actress that became a sensation on YouTube last year. "Someone watching 'The Colbert Report' is worth more to an advertiser than some video submitted by a teenager."
