YouTube losing Google less than predicted

The losses expected to be made by Google from its YouTube business were overblown by Credit Suisse analysts in April, according to another estimate.

The losses expected to be made by Google from its YouTube business were 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 aspredicted 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.

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