According to Google CEO Eric Schmidt, YouTube's business has seen positive growth in recent weeks. The results are mainly due to display advertising and pre-roll ads , which are placed before videos.
If YouTube were to turn a profit, it would be a major milestone for Google. When the search engine acquired the video platform in 2007 for $1.65 billion, it took a serious risk, given that YouTube is in conflict with major media groups over intellectual property rights.
One obstacle to YouTube's revenue stream is chinese overseas america number data a shortage of popular TV shows, while competing platforms are streaming blockbuster content, such as Disney subsidiary ABC, which streams its top shows on Hulu.
There is much speculation about the losses YouTube will suffer . According to the Financial Times Deutschland , Credit Suisse estimates that the platform will lose $470 million in 2009, while market analyst Ramprate predicts a loss of $174 million. But Google CFO Patrick Pichette believes that YouTube will make a profit "in the not-too-distant future."
Before being taken over by Google, YouTube had always rejected the most common forms of advertising on the Internet, arguing that users do not tolerate them. But according to Google, surveys now show that users are more open-minded than previously thought. Eric Schmidt believes that this acceptance of advertising is due to the fact that users receive more professional content in return.
The current economic situation means that YouTube's losses are weighing more heavily on Google's financial balance sheet. The search engine's revenue in the first quarter of 2009 was 3% higher than in the same period of the previous year, something unusual for the leading search engine. Google's profits have grown by 19% (1.5 billion dollars) in the annual comparison thanks to the savings measures.