As the social media monkeys run in circles to crack the code on monetization, Google is doing the same with YouTube Inc. , to little or no avail.
Google acquired YouTube in 2006 and has still been unable to successfully monetize its content. According to The Wall Street Journal, "World-wide revenue from YouTube ads has fallen short of Google's expectations this year, and is likely to total about $200 million for the full year, according to two people familiar with the matter." The same article says Tim Armstrong, Google's head of advertising and commerce in North America, recently detected 105 problems with YouTube's ad sales.
It's that same sad story: Billions of users and massive traffic does not necessarily a bucket of money make. With all its videos and users, YouTube might look like a gold mine, but when it comes down to it, is there really any good way to monetize a couple thousand skateboarding cats? Maybe at a circus sideshow, but on YouTube it's all mainstream content – and not necessarily the best place for ads.
One current master plan in the works for YouTube is to start running pre-roll and post-roll ads in the third quarter of this year. These will, of course, be "relevant" to content. So, a skateboarding kitty may be paired with, say, a pre-roll for Iams, or knee pads. While a Crying Chris Crocker flick might be paired with a pre-roll for crisis counseling, or Creedmore. You get the point.
But surely there's got to be a better way. Pre- and post-rolls on the gazillions of YouTube videos aren't going to cut it. Nor are YouTube users going to put up with 30 second ads on short-form video. And what advertisers are going to want to have their brand names paired with the cradle of crazies mouthing off on YouTube, anyway?
If there's a better solution, though, Google – the king of all things advertising and money – ironically doesn't know what it is. And on top of being unable to monetize YouTube, it may well find itself eventually paying a boatload of royalties to the likes of Viacom for – whoopsie – selling ads against its copyrighted content.
As with any organization seeking competitive advantage, Google seeks to continue to capture a larger market share. We saw this with Microsoft but, the difference in Google’s newly attained competitive advantage is that their products are free versus having a price tag.
"Talk about culture , is there any other company that allows its employees to work on the project of their liking in their spare time "
Why, yes! I would imagine just about any company would allow its employees to work for free in their spare time on something that it then can put out as a product. LOL!
"It is better trying something risking to fail, rather than doing nothing" says the common adage. I don't think that we should blame Google for trying what you think are "disapointments". We cannot expect everything we do to be successful. As a whole Google is a successful company and like many other major companies (such as Microsoft) there is a time for great acheivements and unfortunatly there is a time for failures. What matters is how such companies can recover from that failures.
Re: "I think some of the projects have been included just to make the disappointments count reach 10"
I just wanted to reply to this because we actually had more than 10 and then widdled it down. Nevertheless, that isn't to say you have to agree with us. Glad to have some pushback from you.
But regarding the idea that some of these project are just experimental, you certainly wouldn't get that feeling from the press that regularly reports on Google's every experiment as if it were the replacement for every similar project that came before it.
"There is potential in advertising but it might be harder than anyone thinks"
...might be? more like...certainly is.
Google has to plug every possible copyright infringement leak on Youtube unless they want death by a million cuts. Even if they manage to plug virtually all the holes....there's an army of attorneys salivating to pounce on Google the minute they monetize Youtube...and this is on top of the army that already came after them for the obvious / big-ticket instances of infringement.
"Hey, look, I used my video capture card - Here's the final episode of the Sopranos! woohoo! enjoy!"
RE: numbers, I recall prior to the Google acquisition hearing that the bandwidth cost alone for Youtube was on the order of $2-$3 million per month. I see calculations from 2006 that placed the cost at $170,000 per day, $5.1 million per month, and certainly there's more bits being pumped now than 2 years ago.
I know there are countless commercial sites that lever Youtube for hosting content (marketing or otherwise), I suppose they could charge for that (maybe they already do under certain circumstances?).
If targeting banners and/or pre-roll, postroll, midroll, leave-behind ads are coming, so are the lawyers.
...will be interesting to see how google escapes this trap.
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