YouTube, for example, will account for only roughly 3% of Google’s net revenue this year, or $500 million, estimated Youssef Squali, an analyst at Jefferies & Co.
$500 million revenues are more than twice as much as what most people expect YouTube to enjoy this year.
We’ve called and emailed Youssef to ask him to explain himself, but his secretary tells us he’s busy and we haven’t heard back from him yet.
Probably Youssef based his $500 million call on YouTube search ads business, which he expressed a great deal of optimism for last November. That’s when he wrote:
Google’s plan to serve targeted ads next to video searches on YouTube should allow greater monetization of search traffic on its flagship video site. In July, YouTube was among the top three search sites in the US (behind Google but close to Yahoo!) at nearly 2.5B searches/month. While brand advertisers have historically shunned user generated content (UGC), recent deals withpremiumcontent owners such as MGM should greatly help YouTube become a more mainstream destination for them. We believe YouTube will overtime become a major driver of display ads.
At the time, we too wondered if YouTube search ads could be a billion dollar business, but a shareholder of video-search engine Blinkx laughed us off, saying $16 CPMs on video search ads are too high to hope for. We’re keen to hear Youssef’s rebuttal.
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