YouTube was created and found by three persons who were employed by Paypal. Their creation was fast becoming a must to go place for short clips of videos. Little that they knew that later Google bought YouTube for $1.65 billion. The three people that had found YouTube are Chad Hurley, Steve Chen, and Jawed Karim. These are known facts about YouTube and you can find it all at Wikipedia.
After spending a nearly $2 billion, Google is still not able to make real profit with YouTube. Instead, it seems as if Google is pouring more money out of its company to run YouTube each day. Some people think YouTube is a big cash sinkhole for Google. These people know the facts, but do they know the real motives and the real facts behind Google’s YouTube?
Only Google knows why it is still pouring huge amount of money into keeping YouTube running millions of dollars. How many millions? The amount is up in the air for anyone to guess. Some companies out there had guessed that YouTube is losing about $170 million or more a year.
YouTube is losing money, but its web traffic has never been better. Google says that YouTube is generating 1 billion page views a day. This means every second, there is 11,574 page views being served. This kind of traffic is the type of traffic that many website owners want to get. Then again, to run that many page views a second, a website needs cash in millions to pay for the bandwidth and storage, and the process has to be repeated annually.
Only Google and few other big players on the world wide web that have the ability to keep an enormous cash sinkhole stays churning. The question is still why Google has not mind about YouTube’s profitability. But if one is asking this question, then one has to admit that Google is basically carrying on its tradition. If you look at Google’s projects such as Gmail, search, books, Google Earth, GOOG-411, maps, Picasa, Android, and others, these aren’t cheap projects, but these projects are for free to use. Maybe YouTube is just one of those projects, and Google is doing this because it simply can.
Google can afford to give out expensive free meal, but it doesn’t give out for nothing. Some projects that Google runs may record and carefully study the usage patterns of web surfers and incorporates the knowledge into the future projects or applies such knowledge to improve Google’s main project which is search. It simply can! Google has no need of trying to make YouTube and other projects stays profitable, because its Adwords technology that is working closely with Google’s search and Google’s Adsense — these help Google makes billions of dollars. Its ability to give out enormous charity implies that if you help support Google’s search by using it more frequently, you in turn help Google stays profitable enough to give out even more technological charity. It’s a subtle profit circle and a message; as the way things are running, Google has to be extremely crazy to abandon YouTube and its other free to use projects.
Vinh Nguyen
