New Report Slashes YouTube Loss Estimate By $300M
A little less than three months ago, Credit Suisse predicted that YouTube’s 2009 losses would be in the neighborhood of $470 million. Which is, of course, quite bad. But a new report from RampRate – together with info out of Microsoft – makes it look like Google’s video-sharing site is doing somewhat better.
Although the RampRate report stuck with the concept of YouTube not making a profit, it pegged the site’s losses at $174.2 million, or only about 37 percent of Credit Suisse’s estimate. Contributing factors include confidence in Google’s technical prowess and negotiating skills.
Thomas Claburn explains, "Google’s ownership of dark fiber, its cost-efficient data centers, its commodity server equipment, and its use of peering agreements in lieu of paying for bandwidth combine to give the company a far lower cost model . . ."
As for how Microsoft enters into the equation, it seems that YouTube’s close to putting another rival behind it. Ina Fried spoke to Microsoft Vice President Erik Jorgensen and wrote afterwards, "Soapbox, the video site it once hoped might take on YouTube in the user-generated content arena . . . is one of the areas that Microsoft is pulling back on in the wake of a tough economic environment."
And less competition might help YouTube establish an even more dominance stance.
We’ll keep an eye out for additional reports, and the site’s finances should definitely be worth watching in 2010.