google to buy you tube?

[ElFenix]

Originally posted by: Safeway
Noooo.

What about all the nudity and such? Google will G-rated-ify it.

that's what youporn dot com is for

 

[Staples]

Considering that youtube does not even make money, its value to me would be no more than $50m.

Also, I don't see why others don't just copy this. They will have no problem gaining a community. This is a lot cheaper than $50 let alone 1.5b

 

[imported_elwood]

I read an article in PC Magazine that it is costing Youtube about $1.5 million/month to operate.

They have to do something sooner or later. If they dont sell, they'll need to implement something to generate enough revenues to pay for their bills

 

[z0mb13]

Originally posted by: ElFenix

Originally posted by: Safeway
Noooo.

What about all the nudity and such? Google will G-rated-ify it.

that's what youporn dot com is for

after I found out about youporn I no longer use bittorent..

amateur porn FTW!!!

 

[Vic]

Originally posted by: Goosemaster

Originally posted by: HendrixFan
Any amount would be a steal for YouTube, even $1.6 million. The only reason they haven't been sued yet is that they have no money to be sued for. Apparently, copyright holders are just waiting for some stupid company to buy them up so that they can be sued into oblivion.

YouTube bleeds money terribly, has no business model to make revenue, and when bought they will be sued into extinction. Only a fool would buy them up, at any price.

I would tend to agree

As do I. However, youtube technology and potential future business model is well worth picking up. Streaming internet video on demand is the TV of the future. It's just that no one quite knows how to make it work yet.

 

[z0mb13]

Originally posted by: Vic

Originally posted by: Goosemaster

Originally posted by: HendrixFan
Any amount would be a steal for YouTube, even $1.6 million. The only reason they haven't been sued yet is that they have no money to be sued for. Apparently, copyright holders are just waiting for some stupid company to buy them up so that they can be sued into oblivion.

YouTube bleeds money terribly, has no business model to make revenue, and when bought they will be sued into extinction. Only a fool would buy them up, at any price.

I would tend to agree

As do I. However, youtube technology and potential future business model is well worth picking up. Streaming internet video on demand is the TV of the future. It's just that no one quite knows how to make it work yet.

if anyone knows how to make it work, its google

 

[vi edit]

Hmmmmm....

gootube just doesn't sound quite right

 

[uhohs]

doesn't matter to me.

google video removed almost all my videos.
youtube banned my account and removed all my videos.

jerks.

 

[dustmann]

Originally posted by: vi_edit
Hmmmmm....

gootube just doesn't sound quite right

That sounds like a part of youporn

 

[Syringer]

Originally posted by: uhohs
doesn't matter to me.

google video removed almost all my videos.
youtube banned my account and removed all my videos.

jerks.

Posting child porn is baddd, mmmkay?

 

[iamme]

i'd imagine with all the resources that Google has, they've probably got a good reason to buy YouTube AND have faced the possibility of law suits.

lol@people who think Google would spend $1.6B on a whim, without a small army of markters, lawyers, programmers, etc, etc, etc exploring every aspect of it.

 

[z0mb13]

Originally posted by: iamme
i'd imagine with all the resources that Google has, they've probably got a good reason to buy YouTube AND have faced the possibility of law suits.

lol@people who think Google would spend $1.6B on a whim, without a small army of markters, lawyers, programmers, etc, etc, etc exploring every aspect of it.

most likely they would have a clause, any lawsuits before the sale would be the responsibility of the old owner

 

[bigdog1218]

Originally posted by: mobiblu
don't google already have google video...why need youtube?

Because when you have enough money you don't have to outhink you're competition, you can just buy them. I wonder how long it's going to take for the people to lose this knight in shining armor they have of google, like they're any different than microsoft or any other large company.

 

[HendrixFan]

Originally posted by: Pastore

Originally posted by: HendrixFan
Any amount would be a steal for YouTube, even $1.6 million. The only reason they haven't been sued yet is that they have no money to be sued for. Apparently, copyright holders are just waiting for some stupid company to buy them up so that they can be sued into oblivion.

YouTube bleeds money terribly, has no business model to make revenue, and when bought they will be sued into extinction. Only a fool would buy them up, at any price.

No business model? Wonder how much ESPN payed for this page. Right there is your business model. Where there are people watching stupid home made videos there will be companies paying for eyeballs hitting their ads.

I doubt ESPN paid anything for it, there is no need to pay to upload their own videos. They likely had some intern register and upload commercials. ESPN sees that there is eyeball traffic at YouTube and uses that to draw people to their commercials. However, YouTube has the huge traffic due largely to copyrighted material. Yes, there are plenty of selfmade videos that get traffic, but the bulk of traffic brought in is through copyrighted videos. Once they are forced to remove the offending material their traffic will drop off considerably, and there will be little incentive for ESPN to bother putting up their commercials there.

 

[iamme]

Originally posted by: HendrixFan

Originally posted by: Pastore

Originally posted by: HendrixFan
Any amount would be a steal for YouTube, even $1.6 million. The only reason they haven't been sued yet is that they have no money to be sued for. Apparently, copyright holders are just waiting for some stupid company to buy them up so that they can be sued into oblivion.

YouTube bleeds money terribly, has no business model to make revenue, and when bought they will be sued into extinction. Only a fool would buy them up, at any price.

No business model? Wonder how much ESPN payed for this page. Right there is your business model. Where there are people watching stupid home made videos there will be companies paying for eyeballs hitting their ads.

I doubt ESPN paid anything for it, there is no need to pay to upload their own videos. They likely had some intern register and upload commercials. ESPN sees that there is eyeball traffic at YouTube and uses that to draw people to their commercials. However, YouTube has the huge traffic due largely to copyrighted material. Yes, there are plenty of selfmade videos that get traffic, but the bulk of traffic brought in is through copyrighted videos. Once they are forced to remove the offending material their traffic will drop off considerably, and there will be little incentive for ESPN to bother putting up their commercials there.

uh, so YouTube graciously let them edit the page itself and stick a huge banner up there for free........maybe because they love football so much? LOL. 'm certain that ESPN paid a good chunk of change for that custom page.

edit: wow, don't i look foolish.....i didn't even know you can customize your own page, lol. my apologies.

 

[HendrixFan]

Originally posted by: iamme

Originally posted by: HendrixFan

Originally posted by: Pastore

Originally posted by: HendrixFan
Any amount would be a steal for YouTube, even $1.6 million. The only reason they haven't been sued yet is that they have no money to be sued for. Apparently, copyright holders are just waiting for some stupid company to buy them up so that they can be sued into oblivion.

YouTube bleeds money terribly, has no business model to make revenue, and when bought they will be sued into extinction. Only a fool would buy them up, at any price.

No business model? Wonder how much ESPN payed for this page. Right there is your business model. Where there are people watching stupid home made videos there will be companies paying for eyeballs hitting their ads.

I doubt ESPN paid anything for it, there is no need to pay to upload their own videos. They likely had some intern register and upload commercials. ESPN sees that there is eyeball traffic at YouTube and uses that to draw people to their commercials. However, YouTube has the huge traffic due largely to copyrighted material. Yes, there are plenty of selfmade videos that get traffic, but the bulk of traffic brought in is through copyrighted videos. Once they are forced to remove the offending material their traffic will drop off considerably, and there will be little incentive for ESPN to bother putting up their commercials there.

uh, so YouTube graciously let them edit the page itself and stick a huge banner up there for free........maybe because they love football so much? LOL. 'm certain that ESPN paid a good chunk of change for that custom page.

edit: wow, don't i look foolish.....i didn't even know you can customize your own page, lol. my apologies.

Other than the green background, it looks just like any other user profile page.

We are drifting away from the point though. The bandwidth costs they incur are more than they can make by selling adspace. Once they have financial backing, they will be sued for all they are worth. They will either lose everything, or they will discontinue hosting copyrighted files. If they stop hosting copyrighted files, they wont have the kind of traffic that will earn them revenue.

We have watched for 7+ years as one company after another gets killed by the copyright monster. The media companies will not allow something like YouTube to survive with their content.

 

[Drakkon]

this story wouldnt have "leaked" unless google was seriously considering it...and if they were considering it they proobly already looked into all the copyright stuff.
who knows they might even be in leauge with the networks to create "channels" for each network - allows the networks to advertise their content - or purchase shows for download/playback on demand without having to expend their own servers/bandwidth.

 

[Gooberlx2]

Originally posted by: Safeway
Noooo.

What about all the nudity and such? Google will G-rated-ify it.

What makes you say that? They don't G-rate their image searches when the uncheck the "moderate search results".

I guess I've never really looked into it though....as I wasn't even aware that there was nudity on youtube.

 

[theNEOone]

Originally posted by: HendrixFan

Originally posted by: iamme

Originally posted by: HendrixFan

Originally posted by: Pastore

Originally posted by: HendrixFan
Any amount would be a steal for YouTube, even $1.6 million. The only reason they haven't been sued yet is that they have no money to be sued for. Apparently, copyright holders are just waiting for some stupid company to buy them up so that they can be sued into oblivion.

YouTube bleeds money terribly, has no business model to make revenue, and when bought they will be sued into extinction. Only a fool would buy them up, at any price.

No business model? Wonder how much ESPN payed for this page. Right there is your business model. Where there are people watching stupid home made videos there will be companies paying for eyeballs hitting their ads.

I doubt ESPN paid anything for it, there is no need to pay to upload their own videos. They likely had some intern register and upload commercials. ESPN sees that there is eyeball traffic at YouTube and uses that to draw people to their commercials. However, YouTube has the huge traffic due largely to copyrighted material. Yes, there are plenty of selfmade videos that get traffic, but the bulk of traffic brought in is through copyrighted videos. Once they are forced to remove the offending material their traffic will drop off considerably, and there will be little incentive for ESPN to bother putting up their commercials there.

uh, so YouTube graciously let them edit the page itself and stick a huge banner up there for free........maybe because they love football so much? LOL. 'm certain that ESPN paid a good chunk of change for that custom page.

edit: wow, don't i look foolish.....i didn't even know you can customize your own page, lol. my apologies.

Other than the green background, it looks just like any other user profile page.

We are drifting away from the point though. The bandwidth costs they incur are more than they can make by selling adspace. Once they have financial backing, they will be sued for all they are worth. They will either lose everything, or they will discontinue hosting copyrighted files. If they stop hosting copyrighted files, they wont have the kind of traffic that will earn them revenue.

We have watched for 7+ years as one company after another gets killed by the copyright monster. The media companies will not allow something like YouTube to survive with their content.

iamme, you are not wrong. from forbes:

http://www.forbes.com/free_forbes/2006/1016/100a.html

On Aug. 22 YouTube set its first big push into video ads. The site created special "brand channels" to draw users to promotional material. The Paris Hilton channel has an original broadcast by the heiress promoting her Warner Bros. album...YouTube also created a daily "Participatory Video Ad" on the opening page...NBC and ESPN quickly signed on to tout their new shows...

The participatory slot has been sold out ever since, likely bringing in about $175,000 and 400,000 viewers a day. No wonder Hurley says YouTube won't need more venture funding--though he won't say when it will be in the black.

Companies including Cingular and Nestlé have now signed up to sponsor contests...YouTube's deal with Cingular...generated a thousand stories in print and on TV....Cingular and YouTube won't put a dollar value on the 11-week promotion, but it could bring in several million for YouTube. More deals are in the works. Cingular's rivals instantly got interested.

$175,000 a day just from one ad slot?!?!?!?! um yah, at $5.25 million a month from just one ad spot, i think the idea that youtube doesn't make any money is long gone.


=|

 

[archiloco]

Originally posted by: theNEOone

Originally posted by: HendrixFan

Originally posted by: iamme

Originally posted by: HendrixFan

Originally posted by: Pastore

Originally posted by: HendrixFan
Any amount would be a steal for YouTube, even $1.6 million. The only reason they haven't been sued yet is that they have no money to be sued for. Apparently, copyright holders are just waiting for some stupid company to buy them up so that they can be sued into oblivion.

YouTube bleeds money terribly, has no business model to make revenue, and when bought they will be sued into extinction. Only a fool would buy them up, at any price.

No business model? Wonder how much ESPN payed for this page. Right there is your business model. Where there are people watching stupid home made videos there will be companies paying for eyeballs hitting their ads.

I doubt ESPN paid anything for it, there is no need to pay to upload their own videos. They likely had some intern register and upload commercials. ESPN sees that there is eyeball traffic at YouTube and uses that to draw people to their commercials. However, YouTube has the huge traffic due largely to copyrighted material. Yes, there are plenty of selfmade videos that get traffic, but the bulk of traffic brought in is through copyrighted videos. Once they are forced to remove the offending material their traffic will drop off considerably, and there will be little incentive for ESPN to bother putting up their commercials there.

uh, so YouTube graciously let them edit the page itself and stick a huge banner up there for free........maybe because they love football so much? LOL. 'm certain that ESPN paid a good chunk of change for that custom page.

edit: wow, don't i look foolish.....i didn't even know you can customize your own page, lol. my apologies.

Other than the green background, it looks just like any other user profile page.

We are drifting away from the point though. The bandwidth costs they incur are more than they can make by selling adspace. Once they have financial backing, they will be sued for all they are worth. They will either lose everything, or they will discontinue hosting copyrighted files. If they stop hosting copyrighted files, they wont have the kind of traffic that will earn them revenue.

We have watched for 7+ years as one company after another gets killed by the copyright monster. The media companies will not allow something like YouTube to survive with their content.

iamme, you are not wrong. from forbes:

http://www.forbes.com/free_forbes/2006/1016/100a.html

On Aug. 22 YouTube set its first big push into video ads. The site created special "brand channels" to draw users to promotional material. The Paris Hilton channel has an original broadcast by the heiress promoting her Warner Bros. album...YouTube also created a daily "Participatory Video Ad" on the opening page...NBC and ESPN quickly signed on to tout their new shows...

The participatory slot has been sold out ever since, likely bringing in about $175,000 and 400,000 viewers a day. No wonder Hurley says YouTube won't need more venture funding--though he won't say when it will be in the black.

Companies including Cingular and Nestlé have now signed up to sponsor contests...YouTube's deal with Cingular...generated a thousand stories in print and on TV....Cingular and YouTube won't put a dollar value on the 11-week promotion, but it could bring in several million for YouTube. More deals are in the works. Cingular's rivals instantly got interested.

$175,000 a day just from one ad slot?!?!?!?! um yah, at $5.25 million a month from just one ad spot, i think the idea that youtube doesn't make any money is long gone.


=|

ok i understand now...

 

[HendrixFan]

http://blogs.zdnet.com/Ratcliffe/index.php?p=186

Froosh over at hipmojo.com argues that YouTube is "wildly profitable" and estimates the company pulls down $7.5 million a month in revenue. Venture capitalist Fred Wilson says Froosh's analsysis is not "crazy math," but I'd argue it is sketchy and decidedly optimistic math.

Let's go to the numbers?. Froosh's income statement for YouTube looks like this:

Home page ads: $175,000 a day x 30 days a month = $5.25 million in revenue
One ad per videostream served @ 100,000,000 streams a day @ a $0.50 to $2.00 CPM = $50,000 to $200,000 x 30 days = $1,500,000 to $6,000,000 in revenue
For a total of about $7.5 million a month in revenue.

Says Froosh: "Call me crazy, but that means that just with its main page alone, YouTube more than covers its bandwidth charge?"

Well, not so fast.

First, let's look at the numbers Froosh relies on. According to PaidContent, Froosh's source for the numbers on which he builds his projections, which does notYouTube is probably still running in the red.seem to have verified the financial terms of the home page placement conclusively (in comments, the reporter says it is "speculative"), the $175,000 generates about 400,000 viewers for the advertiser. This language suggests that it is may be a CPC deal, rather than CPM-based and that makes more sense since the CPM at $175,000 per day with 400,000 viewers would be $437.50, which is high-bubble pricing that, to my knowledge, no one pays for impression-based advertising today.

If it is a CPC deal and YouTube is generating one click in 50 impressions, it would take 20 million impressions to generate 400,000 viewers. Given that the site has about 40 million streams a day, it's not beyond the realm of possibility that they generate that many clicks, but one wonders whether the home page is seen even a small fraction of the time?many streams come from embedded players, so there is no actual contact with the YouTube site.

The second problem with Froosh's numbers is that he uses the figure 100,000,000 video streams a day to calculate other ad revenues. PaidContent reports that YouTube streams only 40 million videos a day?less than half the basis of Froosh's revenue calculation. And some of that inventory is presumably consumed by the front page placement (which would assume a home page clickthrough rate of four percent, not beyond reason, but close), so let's say that YouTube has free inventory of perhaps 30 million impressions a day, not 100 million.

If that's the case, at CPMs of between $0.50 and $2.00, the potential revenue is only $15,000 to $60,000 a day, as little as $450,000 a month.

Now, let's discount all the revenue by 20 perent to account for the cost of sales. And, because no sale is unnegotiated, let's assume that many customers are paying less than the rate card. We can't guess what the actual fees are, because they are unpublished and "speculative" at this point, but we can assume that some of the days of the month are not fully paid placements on the home page, whether because of discounts or make-goods on inventory needed to meet advertiser expectations.

So, that's 20 percent off revenue for sales cost and let's say 20 percent off for discounts and make-goods, so the company is really only likely to be making $175,000 on its home page every other day or so. At a 40 percent discount for sales and discounts, the monthly revenue from the home page leaves $3.15 million a month from the premium placement on the home page.

Now, the CPM rate Froosh used for his calculation of other revenue is pretty optimistic. Much of the AdSense inventory may sell for pennies, rather than dimes or dollars, for example. I'm only going to say that a $0.50 CPM is very aggressive and, therefore, YouTube probably makes less than Froosh estimates. For argument's sake, let's agree they make the low end of Froosh's estimates, another $1,500,000 a month.

Now, it looks more like YouTube's monthly revenue is probably closer to $4.65 million. That still feels high, but I'm willing to live with it. Does that make YouTube "wildly profitable" and Froosh argues?

Short answer: No. PaidContent does provide a figure for bandwidht used daily by YouTube, about 200 terabytes a day. I've looked into streaming and downloading bandwidth pricing and find that most providers are offering a Gigabyte of throughput for around $0.85. That would place YouTube's daily bandwidth costs at $170,000, or $5.1 million a month.

Let's be really aggressive and assume YouTube is getting a deep discount from Limelight Networks, its hosting provider (though probably in trade for equity, which investors need to be leery about, because it dilutes the value of future shares and may represent a big increase in real costs if the deal lapses). If Limelight is charging $0.45 a Gigabyte for throughput, YouTube's costs are $90,000 a day and $2.7 million a month.

But throughput isn't all the costs YouTube is paying for. Storage of all that data costs something, especially as you have to replicate data across the world to support high-performance playback. These costs are factored into Limelight's pricing. In other words, Limelight is probably charging something closer to $0.65 per Gigabyte than $0.45.

Let's revise the bandwidth costs up to account for storage and maintenance costs to $130,000 a day and $3.9 million a month.

I've never seen employee numbers for YouTube, but if it isn't 50 people I'd be surprised. At an average salary of $50,000 a year, the company is looking at about a quarter million a month for salaries. Add other overhead, such as office space, computers, accounting and marketing, and you're looking at about $400,000 to $450,000 a month in salaries and general and administrative costs.

So, finally, back to the numbers. Is YouTube "wildly profitable"? If we take the adjusted numbers and add in expenses, the answer is certainly "No."

Total Revenue is $4.65 million a month after sales costs and discounts.
Bandwidth/Hosting Costs: $3.9 million a month
Salaries, G&A and other costs: $450,000 a month
Profit = $300,000 a month or a net margin of about 6.4 percent.

That looks like YouTube may be breaking even, but we've been generous in revenue calculations and, perhaps, in the cost of people and operations. YouTube is probably still running in the red.

 

[randomlinh]

Originally posted by: theNEOone
$175,000 a day just from one ad slot?!?!?!?! um yah, at $5.25 million a month from just one ad spot, i think the idea that youtube doesn't make any money is long gone.

they make money... they just don't make any profit yet.

and i prefer youtube over google video because of how there's actually a user page w/ all their videos.. don't have to use a search string to do it.

altho, with that said, both suck for quality. I was watching the 30 Rock clip... I could barely tell tina fey was tina fey.

 

[theNEOone]

Originally posted by: randomlinh

Originally posted by: theNEOone
$175,000 a day just from one ad slot?!?!?!?! um yah, at $5.25 million a month from just one ad spot, i think the idea that youtube doesn't make any money is long gone.

they make money... they just don't make any profit yet.

and i prefer youtube over google video because of how there's actually a user page w/ all their videos.. don't have to use a search string to do it.

altho, with that said, both suck for quality. I was watching the 30 Rock clip... I could barely tell tina fey was tina fey.

you're right, i suppose i should revise my statement to read "the idea that youtube isn't a good investment because they're not currently profitable is not a strong argument."


=|

 

[lokiju]

Damn, 1.6 billion seems pretty steep.

If they take away all the ripped TV show clips and things of that nature then it's going to stopped being used by a lot of people anyways.

Thats half the reason I like the site, I got to see this Weeks South Park episode from there but once it's owned by Google I'll be surprised if things like that get by anymore.

 

[intogamer]

Youtube is not making enough to be considered profitable
A while back they were saying 15sec or 30sec ads would make the company profitable

they should wait for atleast 2 years

Myspace 560mil?
Friendster is going 1bil with yahoo + incentives?

Takeovers are get higher and higher