Posted on Wednesday, Feb 05 2020 @ 14:42 CET by Thomas De Maesschalck
One of the things that surprised me over the past decade is how tech giants like Google and Facebook managed to monetize free service. When Google bought YouTube in 2006, it was hard to imagine they would be able to turn the service profitable. But that's exactly what Google did, parent company's Alphabet's latest earnings release revealed that YouTube generated a massive $15 billion in revenue last year.
“Our investments in deep computer science, including artificial intelligence, ambient computing and cloud computing,
provide a strong base for continued growth and new opportunities across Alphabet,” said Sundar Pichai, Chief Executive
Officer of Alphabet and Google. “I’m really pleased with our continued progress in Search and in building two of our
newer growth areas — YouTube, already at $15 billion in annual ad revenue, and Cloud, which is now on a $10 billion
revenue run rate."
Similarly, Facebook managed to turn Instagram into a big advertising powerhouse. Bloomberg heard from a source
close to Facebook that Instagram generated an astonishing $20 billion in ad revenue in 2019. That's a quarter of Facebook's total sales. Not bad considering they bought the app for $715 million in 2012.
The app brought in about $20 billion in advertising revenue in 2019, said the people, who asked to remain anonymous because the figures aren’t public. That beats Google video unit YouTube, which recorded $15.1 billion in ad sales -- a number parent company Alphabet Inc. revealed Monday for the first time. Facebook declined to comment.