Google: YouTube ‘Monetizing Well,’ Helping Partners Make Money

YouTube might not be profitable yet, but the company is making strides in monetization, execs on Google’s fourth quarter earnings call said today. While not providing much detail for how much revenue the online video site is making or when it will break even, the execs reiterated that YouTube is gradually becoming a real business.

“YouTube is in fact monetizing well, and we’re helping lots of our partners make money,” said Jonathan Rosenberg, senior vice president of product management. The increase in monetization comes in part from drastically increasing the number of videos it monetizes, but it also comes from increased acceptance by advertisers.

Nikesh Arora, president of global sales operations and business development, said that YouTube had several successful ad campaigns over the quarter, including a campaign for Avatar that took advantage of all the site’s display advertising capabilities. CFO Patrick Pichette noted that the home page of YouTube was sold out almost every day during the fourth quarter, with the site selling ads in more than 20 countries worldwide.

That’s because YouTube is becoming increasingly important to brands and agencies, according to Arora. “There’s been a big shift… [YouTube] has gone from being ‘nice to have’ to an essential part of the media mix,” he said.

YouTube revenues might not come just from advertising in 2010; yesterday, the site dipped its toes into the movie rental business by partnering with the Sundance Film Festival to offer five independent movies featured at the festival for rent. The site could possibly expand that business to other partners later on down the line.

Regardless of where the money comes from, YouTube could become profitable sooner rather than later. Six months ago, on the company’s second quarter earnings call, Pichette said that the site would be “very profitable” in the “not too distant future,” and the company has been working hard to deliver on that promise.

Increased ad sales and could lead to YouTube posting its first profit during 2010, according to one analyst. Last week, Barclay’s Capital analyst Doug Anmuth suggested that YouTube could become profitable in 2010, with revenues growing more than 55 percent year-over-year to $700 million.

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