Google losing from 1/3 to 1/2 a Billion USD per Year on Youtube

I was doing some minor research for my forum a few months ago on Google's acquisition of Youtube in 2006 for 1.6 Billion USD in stock option.

As everyone knows by now that Youtube was operating at losses since 2005. The original people who made youtube had up to 11 million in debt from 2005-2006 before selling to Google. The amazing thing was, it was sold for 1.6 billion USD.

Now to the more amazing thing, in a recent news by Goodmorning America via Yahoo there's a rumor that Youtube is costing Google from anywhere 30-44 million USD a month or more in losses due to the high bandwidth usage and non profit generating ads.

This losses is account up to 1/3 of a billion USD to 1/2 of a billion USD per year. So Google is losing $360+ millions per year, is this a no brainer? Should they unplug Youtube already? Or continue to throw cash away each year...billions of dollars that is.

You can also follow the topic by going to my forum/topic is located at "profitable or not section"

 

They just need to ban fan made music videos and they will cut back on %80 of their bandwidth usage.

 

It's a big website but if it's not making any money what's the point.

 

Unplug YouTube? How do you think they should do that? Google was probably the only company who was ready to buy YouTube at the time -- and who had the cash. They'll keep on to YouTube, I'm sure, even if that means losing money.

 

It's the domination. They want to dominate the video sector.

 

What's the reason for domination though? As far as i'm concerned it's not domination if they're not gaining anything from it. What's the competition? To see who can lose the most money from doing it?

 

1.Buy youtube

2.???????????

3.Profit!

 

Theres one thing to domin ate , but at the end of the day doesent every company want to make money? so why are they risking losing so much just for domaination?

 

This is what I was thinking too, especially if its a billion in 2 years, the more usage, the more the cost.

Its understandable that if the business is at breakeven, but common, this is billions of USD. We are not talking about millions or hundreds of millions, a certain billions.

What are they possibly thinking at this point?

Surely they could use those billions to give out to charities.

 

This fact is false.

I saw someone mention in other post about "It costs 2-4USD per user that gets onto youtube"

Google is really not loosing money to YouTube like you think.

They make enough to make up for money lost in other areas (If they are evne losing anything at all)

They have nothing to worry about, trust me.

 

You have to consider the value of the brand though. Google has already got ubiquity over the search engines and they want to retain it over the video market.

They will never get rid of it because it will always dominate the video market

 

google might something in plan for youtube .
going into loss is what ever company wanna avoid

but i must say Youtube is cool

 

Do you have any proof to back up your claim? I've read that Google is losing money with YouTube many times in many different articles and it makes perfect sense logically.

I think most people just cannot believe that Google could lose money on anything because they've been so successful.

 

They are working on monetizing it. I say just cut out the non profit ads and just place Adsense

 

I didnt know that google is loosing on youtube .
is this based on real facts ?

 

This is a fact.

Here's an article from barons.com that supports this.
http://blogs.barrons.com/techtraderdaily/2009/04/03/given-youtube-losses-should-google-buy-twitter/

I thought the losses are like 1/3 of a billion to 1/2 a billion. It looks even bigger, over 740 millions per year with revenues making up about 240 millions. the larger the customer base, the more the losses.

 

yes i agree that google wants to be gaint of net and like google search youtube is very popular and sooner or later they will find any strategy which will earn profit for them but they will never unplg from youtube for sure.

 

you tube is very big and only google can afford to lose after you tube

 

they will be having any policy behind this, as when ever they will feel they are losing money they will make youtube a money machine for their users as well as for them self also

 

Indeed. Google will work their way around this one, they always do.