Over the weekend, Google (GOOG) doubled the size of videos users can store on YouTube servers, bumping the limit from 1 GB to 2 GB.
Given Google CFO Patrick Pitchette’s pledge to “starve the losers” and “feed the winners” at Google, we read the move as new evidence in favour of the consultants at RampRate who say YouTube costs Google much less to run than everyone thinks.
Earlier this month, RampRate estimated that it costs Google $170 million to run YouTube. That’s $290 million less than Credit Suisse’s estimate.
RampRate says the bankers don’t account for the money Google can save through peering, buying bandwidth in bulk, and running server farms in Iowa. RampRate also says most YouTube videos aren’t expensive to store because they’re hardly ever played.
Doubling users’ storage capacity also makes YouTube a friendlier place for high-definition videos shot by semi-professional filmmakers who create videos advertisers might actually want to put their products next to.
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