YouTube will be profitable in the near future, says Google,
whichacquiredthe loss-making video sharing site in 2006
for $1.65bn.
The cost of running the site is estimated to be $711m. This
includes bandwidth, content licensing, advertising revenue shares,
and hardware storage.
Despite the initially low level of advertising support on
YouTube, Google has reported a 300% increase in the past year,
according to
Reuters.
Eric Schmidt, Google chief executive, said YouTube was on a
pleasing trajectory with Google helping marketers to generate
adverts for the video sharing service.
Google yesterday
reported net income of $1.48bn for the second quarter, an 18%
increase compared with the same period a year ago.
In a conference call with analysts afterwards, Google chief
financial officer Patrick Pichette said new ad formats have
increased YouTube's appeal to advertisers.
"In the not long, too-long-distant future, we actually see a
very profitable and good business for us," he said.
Earlier this year,
financial analysts estimated YouTube annual losses to be
between $174m and $470m.