I find your opinion on YouTube to be myopic. At best YouTube is a revolutionary service that allows individuals and corporations to compete and collaborate on a level field; at worst YouTube has yet to prove it can generate money. Either way, claiming that YouTube has failed is erroneous.

Greg Schnese

It sounds plausible but where are the numbers to back up what you are saying?

Also…I am not sure you can say it’s a fail not knowing Google’s short-term and long-term strategy…

Come on dude. The cost of broadcast infrastructure *does not* get paid for on a per viewer basis. Even to the extent there are incremental costs, they are associated with physical area, not number of listeners. And once you have covered the physical area, you are done. Forever. Even in the case of cable, which does have a one time per household cost, once that cost is done it is done. Paying for every video every time someone sees it is a totally different proposition

@Andrew,
I am well aware of speech to text technology. But it’s not exactly burning up the internet yet is it. And if its so great why does a company with billions of dollars in the bank just fire it up! Just because some technology exists somewhere does not mean that it solves a business problem in a useful way. By virtue of the fact that Google hasn’t yet followed you “insight” about speech to text, I would suspect they are not as sanguine about it as you.

@Jollyjo,

You are correct that Google may have a long term strategy to extract value out of YouTube. But if they do, at the rate they are going, its very far away.

@ Josh,
YouTube has not “decided” to go with inline text ads, they are experimenting with it. But how can inline text ads be of any value (in the way they are for search and ad sense) without the context of the video via text. And how many of the videos are content specific enough to make a text ad actually worthwhile. Right now video ads are not working. And there is no indication that Google has any magic up their sleeves here.

@Steve
Yes amazing growth… at amazing cost. In the old world of economics you cant loose money on every customer and make it up in volume.
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By the way, what all of you miss is what I think is the most important aspect of all of this which is not retrospective but forward looking. And that is that no startup should be looking to be the next YouTube. Even if Google can at some point justify the purchase on a strategic basis, there are few, if any, other profitable exit opportunities for startups in this space.

Have they made money yet? Nope. Can they? I’d put my money on Google figuring a way out to make money with it.

Way, way, way, way, WAY too early to make such a judgment.