YouTube going under?

Prior to stumbling across this article i had no idea YouTube (owned by Google) was in such a financial crunch. Apparently they are spiraling at a faster rate than the newspapers, as hard to believe as that sounds. The echoing sentiment at YouTube is "bandwith ain't cheap!" YouTube operates in the same way that newspapers do, advertisers produce revenue for what they deem as popular and frequently trafficked.

However YouTube sells ads on less than 10 percent of its videos. A research company estimates that 75 million users will play about 375 billion videos this year and you have to produce tons of cash flow to keep that operation running smoothly. To serve up all these streams, the company has to pay for a broadband connection capable of hurtling data at the equivalent of 30 million megabits-per-second—about 6 million times as fast as your home Internet connection. All this bandwidth costs Google $360 million a year, the analysts estimate. Then there is the money the company shells out for rights to professional videos, right around $250 million, stick that in the blender with the cost of misc expenses and YouTube costs about $700 million a year. Here's the soduku problem; they only generate $240 in revenue. It appears to be a futile effort to keep this operation going at half billion dollar deficit.

One of the reasons YouTube has such trouble creating the advertising revenue for such a wealth of videos is that advertisers don't want to advertise on the content that attracts viewers; often lewd and reprehensible conduct that advertisers don't want to associate their name with, because apparently that's what users like to look at. It sounds like a losing effort to me, besides im a vimeo type of guy myself. So enjoy those videos while you can, don't call me clairvoyant when it happens, my portentous post are merely coincidence (wink).