Youtube down the tubes?

Need I say more?

Need I say more?

The title sounds like something out of a poor Japanese translation guide, but it highlights the little-mentioned problem of just how those websites we all know and love are supposed to be profitable. Credit Suisse, a financial service company, recently released a report that estimated that Youtube would lose around $470 million this year. Take a look at that number again, that’s a loss that you’d expect from a finance company, not from one of the most well-known brands in the world.

Coincidentally, Digg.com, which is where I found the Youtube report in the first place, is losing about $5 million a year and living off of venture capitalists who bought into the company some time ago, and an advertising deal with Microsoft. Whatever happened to our beloved, adorably shaggy-haired web industrialsts? Remember when Microsoft thought Facebook was worth $10-15 billion? Where’s that talk now, with advertisers afraid to pay anyone for anything. Bandwith is expensive stuff, and if profit growth can’t keep up with massive user expansions (Facebook now has almost 200 million users) then there’s simply no chance of a long-term continuation.

It’s hard to believe that the likes of Facebook could eventually become top-heavy disasters, but if the money isn’t there, no amount of contribution-less users or name recognition will do them any good. Maybe they just need to see more of those gift things…

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1 Comment

Filed under Business, Media, Morgan

One response to “Youtube down the tubes?

  1. Pingback: Raise your hand if you remember money « Pendulum Opinions’s Blog

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