Youtube a headache for Google

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Despite being one of the most visited sites in the world, YouTube is a big headache for Google, financially speaking, because this year the search engine will lose about $ 470 million because of this video service.

According to calculations made by the Swiss financial group Credit Suisse, revealed by the website The Register, YouTube can not cope with advertising revenues even as it pays in royalties.

To give you an idea, Youtube pays 399 million dollars for the bandwidth so that hundreds of millions of users around the world can see their videos. At present times above figure is enormous , but this doesn’t seem much matter to the search engine.

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However, Youtube does not want people to abandon this project just for bad times. The Internet giant continues to bet on the online videos and is negotiating with Sony Pictures to distribute films on YouTube.

This move would allow the site offer a “pay per view”, while Sony already invested in online videos, have already negotiated with Hulu, and also have their own movie site Crackle.com

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Also,Google is abanding video ads in Google adsense by the end of this month.
In their own words “After re-evaluating the product, we’ve found that it hasn’t been as effective as we had hoped. While we appreciate your interest and support of the product in the past, we have chosen to retire the product.”

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