youtubeuiupdateapril08 thumb Is Youtube really a $1 billion per annum business ?

People could just not stop worrying about how Youtube will make money and when and how much. Silicon Alley Insider has now come up with some interesting estimates claiming that the video site could potentially make as much as $1 billion per annum, which if becomes a reality would amount to almost 5% of Google’s business. So how exactly have they arrived at this conclusion:

Here’s how we get there:

  • Video search engine Blinkx earns a worldwide revenue-per-search around $.0165 ($17 CPM) on the searches that contain ads.
  • ComScore says YouTube served 8.8 billion worldwide searches in September, and queries are growing at a rate of about 38% per year.  So YouTube will serve about 145 billion searches in the next twelve months.
  • We don’t know what percentage of searches YouTube will display ads against, but for Google it was 45.5% in March 2008. Assuming the same ratio, YouTube would serve ads against about 65 billion queries.
  • A $.0165 revenue per search against 65 billion searches is about $1 billion of revenue.

Is it really so, well we have our fingers crossed specially this time of the year around.