YouTube losing over a million a day

Posted on Wednesday, Apr 08 2009 @ 06:26 CEST by Thomas De Maesschalck
Credit Suisse analyst Spencer Wang estimates Google's YouTube service will lose $470 million this year because the popular video sharing site sells advertising only on a fraction of its pages:
YouTube sells ads on less than 3 percent of the Web pages that could carry commercial messages, analyst Spencer Wang wrote Friday in a note to clients. To boost that percentage, Google needs to standardize ad formats and better demonstrate that ads on YouTube help sell products, he wrote.

Weakness at YouTube led Wang to cut his 2009 profit estimate for Google to $4.68 a share from $4.83, according to the report.

Google stock has fallen more than a third from its 52-week high last May, hurt by slowing growth in the online-ad market and by the decline in the broader stock market.

"Despite the growth of YouTube's user base, there is little evidence to suggest Google has been able to materially monetize this usage," Wang wrote. "In light of the current ad recession, experimental budgets are being trimmed."
More info at Seattle Times.

About the Author

Thomas De Maesschalck

Thomas has been messing with computer since early childhood and firmly believes the Internet is the best thing since sliced bread. Enjoys playing with new tech, is fascinated by science, and passionate about financial markets. When not behind a computer, he can be found with running shoes on or lifting heavy weights in the weight room.

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