Posted in: Technology

YouTube costs Google $2 million per day

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I’m sure that this is oldish news but I found it pretty amazing all the same. According to Internet Evolution, using data accumulated from Bear Sterns Co, comScore, Credit Suisse and Google itself, the search giant will spend more than $2 million daily to support the over 375 million expected visitors to YouTube for the year 2009.

Now, Google does not disclose sales figures by division, so there is no definitive revenue number for YouTube. The range of estimates from financial analysts stretches from a low of $90 million (Bear Stearns) to a high of $240 million (Credit Suisse).

All the numbers are well below the estimated maximum of $753 million Google is spending annually, based on our calculations. So, depending on whose version of revenues you accept, Google is losing anywhere from $513 million to $663 million annually on YouTube, or anywhere from $1.4 million to as much as $1.65 million every day (see chart below).

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As David Silversmith points out in the post Google is paying you to watch all those videos in exchange for putting up with ads that aren’t even coming close to help pay the bills. Bandwidth costs alone for Google are estimated to be at a minimum of $1 million per day in order to serve up all those videos. When it comes to storing all that prime video footage the company is spending $36,000 per day with Credit Suisse estimating that YouTube is currently storing at least 5 petabytes of video.

All I can say is – Ouch!

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Comments

5 Responses to “YouTube costs Google $2 million per day”

  1. jimrandomh

    Those numbers come from a source who pulled them out of his ass, and there's no reason to believe they're even within an order of magnitude of the real numbers.

  2. alexis bonte

    if correct, one has to wonder if this is fair competition to other independent sites aiming to make it in the online video space. Free and profitable is ok, but what do you call this?

  3. jegan17

    totally agree. if you search google's annual filing's on the SEC's websites, google says “For example, we have yet to realize significant revenue benefits from our acquisitions of dMarc Broadcasting (Audio Ads) and YouTube. “