Analyst: YouTube Could Turn a Profit in 2010

YouTube might finally be on track to post a profit for the first time ever, after years of losses since Google acquired the company in 2006, according to a research report issued by Barclay’s Capital analyst Doug Anmuth. (Hat tip to Peter Kafka at MediaMemo for pointing it out.)

In his report, Anmuth writes that he believes YouTube will begin contributing positively to Google’s EPS in 2010, projecting that the business unit will generate $700 million in revenue, representing 55 percent growth year-over-year. (Not mentioned is that this implies the business unit generated about $450 million in sales in 2009.) That comes from increased usage by viewers, as Anmuth notes that the total number of YouTube’s videos viewed grew 139 percent to 12.2 billion in November and unique visitors grew 32 percent year-over-year to 129 million.

Despite questions arising about YouTube’s profitability and the costs related to running the site last year — with one analyst estimating that the unit could lose as much as $470 million in 2009 (though others refuted that number) — Google has been relatively pleased with the trajectory that YouTube has been on, at least publicly.

Last summer on Google’s second quarter conference call, Google CFO Patrick Pichette said YouTube would be “very profitable” in the “not too distant future.” And on the company’s third-quarter call, Pichette noted that the company was “monetizing more than a billion video views every week on YouTube.” Google posts earnings again next week, so we’ll see if the company has any update on YouTube profitability then.

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