Thursday, July 3rd, 2008
Google’s motto may be “do no evil”, but the company can do no wrong in the eyes of tech investors and the mainsteam media. However, I suspect the day it decided to lavish some of its pocket money on YouTube may prove to be one of the biggest mistakes the company ever makes.
The $1.65 billion it paid for YouTube may be small beans to the search monolith, but Google has publicly admitted that it can’t find a way to turn a profit from the millions of eyeballs that are watching video on its site every day. Hosting terabyte upon terabyte of video doesn’t come cheaply. Charging users to watch videos is a non-starter, so either Google finds a way to make YouTube more attractive to advertisers, or it’s going to continue to bleed money.
