YouTube Loses Money; Google Keeps it Quiet

YouTube, a Google subvention, has incurred losses that some analysts may have exaggerated. Google does not appear to mind the misperception, according to an internet economics review released yesterday.

RampRate Inc. predictable a $174.2 million loss by YouTube, a far-flung cry as of the $470.6 million loss estimated by Credit Suisse analysts in April. This Credit Suisse research report that became a popular read on Wall Street and online. Ever since Google bought YouTube for $1.76 billion in late 2006, it still has yet to demonstrate it is financially lucrative for Google. It has, paradoxically, proven monetarily lucrative for loads of YouTube users, reminiscent of Chris Crocker (Leave Britney Alone), lonelygirl15 (an worldwide drama sensation) and Brandon Hardesty (the adolescent with the odd faces and noises in the Geico commercial who has in addition signed on for quite a few movies).

Google has granted that YouTube is not profitable, despite the fact that they have refused to present any particulars. Googles CFO, Patrick Pichette, says that estimates by analysts tend to lead to imprecise conclusions. Most people construct outside views of what it costs us to accomplish things, and regularly they embellish, Pichette said in an interview with Mcleans, a Canadian magazine, just subsequent to Credit Suisse released their report.

RampRate says that Google does not appear interested in setting the record straight about YouTubes actual losses. They believe that the enormously high loss perception by analysts helps Google negotiate more favorable contracts with show, TV and music studios. Copyright owners are inclined to be less probable to pursue legal options to receive due royalties and damages if they believe YouTube is a debt maker. Google is no doubt thrilled to let YouTube be known as a monetary folly, RampRate said in their new report.

YouTube spokesman Aaron Zamost alleged that Google has been running advertisements just about millions of user produced videos to diminish YouTubes losses, though he would not really comment on RampRates information. He also said YouTube shares revenue with its business associates, giving Google little basis to purposefully allow YouTubes losses to be exaggerated. We want our partners to do well, because when they achieve something, we do well, Zamost believed.

The actual question is how much it costs Google to operate YouTube. 20 hours of video are supported by Google every minute, requiring high numbers of bandwidth and storage space. Credit Suisse, after lots of investigation and interviews, thinks operation expenses to be as high as $380 million. RampRate thinks it is only $83 million, believing that Google has negotiated lesser costs with broadband providers and information movers. RampRate also thinks Google has assisted keep down YouTubes costs with their own pioneering technology, an idea that Pichette supported when he spoke with Mclean periodical. When individuals run models, they generally use average industry pricing for bandwidth, storage, but we construct the whole lot from scratch, Pichette said in the interview. So we are aware of our cost position but nobody else does.

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