Schmidt Promises New YouTube Monetization Tools

It’s all smoke and mirrors until the products launch, but Google CEO Eric Schmidt promised untold wonders of coming YouTube advertising innovations — “not just putting in-line ads in the things” — in an interview with CNBC’s Maria Bartiromo that will air at 4 p.m. ET today.

Schmidt emphasized that the yet-to-launch ad products would be targeted, saying making money on YouTube would be “our highest priority this year.” He also said something unclear about how Yahoo is trying interesting things in online video advertising too. However, we recently got a demo of Yahoo’s new video ad formats: “clickable” and “interactive.” Update: A YouTube spokesperson said he believe Schmidt misspoke, and meant “YouTube” when he said “Yahoo.” It’ll make more sense when you read the transcript below.

Here’s the relevant portion of the interview transcript, as sent in an email by CNBC:

BARTIROMO: Let me ask you about YouTube and MySpace. YouTube has these phenomenal growth rates. What do you think is behind that?

Dr. SCHMIDT: Video is powerful. And it’s amazing. You know, we started off with Mentos and the other sort of fun videos, and now people, because they have so many digital cameras, are essentially uploading everything. Furthermore, we’re beginning to see glimpses of significant professional content on YouTube. People are using it — because there’s such a large reach, they’re learning how to reach that audience. We’re working but have not yet in my view gotten a breakthrough around monetization. So while we have lots and lots of traffic and we have lots and lots of interesting and creative people and all sorts of controversies — we’re blocked in countries, so on and so on — I don’t think we’ve quite figured out the perfect solution of how to make money, and we’re working on that. That’s our highest priority this year.

BARTIROMO: Which is a huge priority, clearly. A lot of people feel like this is an amazing opportunity for you. So, as far as monetizing that business on YouTube, do you think that takes a year? Does it take the next five years? What’s your time frame on that?

Dr. SCHMIDT: We believe the best products are coming out this year. And they’re new products. They’re not announced. They’re not just putting in-line ads in the things that people are trying. But we have a number — and, of course, Google is an innovative place. The Yahoo! team are trying various new forms of advertising, ones which are much more participative, much more creative, much more — much more interesting in and of themselves. Google believes that advertising itself has value. The ads literally are valuable to consumers. Not just to the advertisers, but the consumers.

BARTIROMO: They want to look at them.

Dr. SCHMIDT: When they’re targeted. When they’re the right ad for what you’re doing or what you care about.

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