YouTube Does Some More (Modest) Boasting: “Growth Is Definitely Good for Our Bottom Line”
by Peter Kafka
Posted on July 20, 2009 at 10:12 AM PT
More love from Google for its oft-maligned YouTube unit: Last week, Google officials went out of their way to praise the video site’s progress and said it was well on its way from money pit to profit center. Today, the company gives YouTube a pat on the back via an atta-boy blog post.
The post, written by two YouTube PR folk, purports to be a bit “myth-busting” about the site’s business model and financial status. But it’s really a series of assertions with little data to back up the claims, many of which we’ve heard before.
So really, the big takeaway here is that the Google folks are feeling ever more confident about YouTube’s prospects, enough to do some public chest-beating. But not enough to actually talk about those prospects in concrete terms.
For instance, YouTube says that estimates that the site can sell ads against only three percent to five percent of its video inventory, first asserted in a well-reported Wall Street Journal piece a year ago, are “old and wrong.” But the company won’t say what percentage of the site it does sell.
Likewise, the company says that analysts’ attempts to peg its bandwidth and hosting costs are off the mark, but doesn’t say what the real numbers are. Nor does it address the amount that YouTube has to pay content providers, either through upfront fees or revenue splits, for their clips.
And the most meaningful boast, I think, is one the company more-or-less made last week: “We are at a point where growth is definitely good for our bottom line, not bad.”
So when will Google finally start coming clean and offering up real data about the site’s performance? Got me. But here’s one indicator to watch for: What the company tells investors.
In Google’s 10-Q, for instance, YouTube is usually described as a black hole that has yet to generate signficant revenue; the company noted the same thing in its most recent quarterly report. A new 10-Q, for the quarter the Google just reported, should be out soon. Let’s see what Google has to say about YouTube in an audited filing.
Comments
One idea for YouTube content would be Logitech web cams that I’ve seen in the stores. I don’t know how to use the camera outside and I wonder if anyone else does.
Posted by terri boothe at July 20th, 2009 at 10:25 amI was more confused by this:
“In our view, the percentage is far less important than the total number of monetized views.”
Sounds like Google is working on its accounting tricks.
Posted by Edward Barrera at July 20th, 2009 at 3:56 pmThat’s not an accounting trick. You’d need numbers to pull off an accounting trick, and there are no numbers here.
Posted by Peter Kafka at July 20th, 2009 at 6:57 pmKafka wrote: “But it’s really a series of assertions with little data to back up the claims, many of which we’ve heard before.”
So you’re calling Google, or at least the authors a liar? Based on what info that you can assert?
There is altogether too much anti-Google ugliness at All Things D.
Posted by Lenny Pudinskaya at July 20th, 2009 at 10:44 pm