Advertising Age is reporting that Google has finally got a solution to its revenue generation woes at its $1.6 billion acquisition of the video sharing site Youtube. Their answer to the problem is to ask the users, who create professional content for others to view, to bring in ads themselves and monetize their content. In doing so these users will get a cut of the revenue where as some amount of it would be eaten up by Google as a fee to provide the hosting and associated bandwidth.
It goes without saying that Youtube is the largest video site on the planet, with more than 4 billion videos viewed in March alone, according to comScore. If you compare this with the estimated revenues, which are projected to be between $90 – $200 million for the year 2008, you get a relatively sorry picture.
However I seriously doubt that Google, The Text Search Giant, bought Youtube for its pageviews or its swelling video repository. Rather the aim was to buy a site on which you could experiment with your video search algorithms and techniques in realtime and on web scale. If you take a closer look at the recent Youtube annotations feature, which allows users to annotate and add bubbles and text to the videos, you would understand that to Google relevance in Video Search is more important than Video Revenues.
Had Video Revenues more important, they would definitely have had come up with some sort of revenue sharing model for content creators, after all other video sharing startups have implemented this since ages now. Google on the other hand is busy perfecting and tweaking algorithms that would help them to quickly and relevantly search videos. Youtube is to video search what Stanford’s Usenet access was to Google, a testbed to tweak and refine the Search Engine. Once Google perfects this, it would be just a matter of months to perfect an Adsense for Videos (or am I getting over excited here).
We all must understand this thing, that Video Search is still not a solved problem, and with the ease with which video content can now be created, increase in broadband, and pervasiveness of wireless technologies. Video creation and consumption on the internet is bound to grow exponentially. So clearly Google is focusing on first things first. What the other BIG COs are doing in this area is yet to be seen.
If google is the king of web, then youtube is the queen as well.
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