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Liz Gannes at NewTeeVee was listening in to Google's earnings call yesterday, and what she heard was Patrick Pichette, Google's CFO, saying that the company expects its YouTube subsidiary to turn a profit very soon. As Gannes pointed out, we don't really know much about how YouTube's doing, though CreditSuisse said in April that the site may lose $470 million in 2009.
Eric Schmidt, Google's CEO, said he thinks that YouTube is on track to where the company wants it to be in terms of profitability. And advertising is up on the site. Google executives are even determining other opportunities for YouTube to boost its income, such as featured video search results, longer videos and pre-rolls (your video will begin in a moment, after this message from our sponsor).
Gannes pointed out that in the past, YouTube had shunned pre- and post-rolls because viewer testing suggested they'd be unpopular. But pre-rolls are pretty common now in streaming video online, so I wouldn't be surprised to see that show up. But at this point, Google's only making money from 9 percent (or maybe a little more, Gannes said) of its viewership. So it's got a lot of room to improve.
As for the viewership, I think people will complain, but they won't leave. And if they do, where will they go that won't eventually sell advertising, too, when it becomes big enough?
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