Is FACEBOOK the answer to effective advertising on YouTube?…..Part 5
Now if you will, let us take a step back from the “1984” paranoid view of Google to the charges of it making money. Sometime ago Google bought YouTube.com for $1.65 billion. http://www.google.com/intl/en/press/pressrel/google_youtube.html
Google did this and in true Google fashion chose not to charge for people using YouTube to view, upload and store videos. It was free for everyone and it was good for everyone, except the video hosting websites that charged money. After some time analysts started to crunch numbers to see just how much YouTube.com was costing Google to maintain? Estimates came to an astounding $1.5 million per day.
http://www.internetevolution.com/author.asp?section_id=715&doc_id=175123
If we think of YouTube as nothing more than an expansion of the “Google Funnel”, an effective one but an expensive one nonetheless, then the Google- YouTube matchup is ideal regardless of what any analyst says. It is safe to say that Google’s cost to maintain YouTube will only diminish in accordance with Moore’s Law as time and usage goes on.
http://en.wikipedia.org/wiki/Moore’s_law
A $1.5 million loss per day is nothing to just brush off though, this realistically equates to the sinking of 12-15 small businesses per day, every day and that makes my skin crawl. So the question is how does Google make money from YouTube? Simple, they make money the way they do best……they advertise. The really big fly in the ointment is that the $1.5million loss per day already accounts for their advertising. They have not been able to effectively pair up advertising with content searches on YouTube like they do for searches done directly through Google.com. This poor pairing of content and ads is caused by numerous reasons but the primary one is that Google doesn’t know enough about us or why we are searching for videos to accurately match up video content to our personal preferences for products and services. Google is slowly building a database of this information based on our Gmail/Google accounts in conjunction with our Google searches and general web usage, but that takes time and when you’re talking a loss of $1.5 million per day, time definitely costs money. Google needs specific information about who we are, what we do, who we like, what we like and how often we like it AND they need it now not 4-5 years from now.
To be continued…..
