The losses expected to be made by Google from
itsYouTube businesswere overblown by
Credit Suisse analysts in April, according to another
estimate.
Consultancy
RampRate expects YouTube to lose Google $174.2m (£107.3m),
rather than almost $500m
as
predicted by Spencer Wang at CreditSuisse.
"Contrary to
Credit Suisse's estimates of a $470mannual loss, Google is more
likely losing a fraction of that amount," said RampRate.
Following analysisof YouTube traffic and advertising, Wang said
the site will generate about $240m in revenue this year, a 20%
increase onlast year.
The cost of running the site is estimated to be
$711m.Thisincludes bandwidth, content licensing, advertising
revenue shares, hardware storage, andsales and marketing.
Google may havedeep pockets, but it must address the issue of
reaping revenue from the massive traffic it generates.
Social media websites are still attempting to build business
models to allow them to make money. "If it was obvious how to make
money out of social
media,
Facebook would be doing it," said one financial services
source.