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Google: YouTube has long way to go

Google CEO Larry Page has said that revenues at YouTube still have a long way to grow, as the search giant reported disappointing fourth-quarter results.

Speaking on an earnings call yesterday, Page said he was excited about YouTube’s growth, adding that the site was having significant advertising success – just not in the context of the wider video market.

“The amount of success we’re having in advertising there is very significant. But it’s not significant compared to the overall video advertising space. It’s a tiny percentage of that. We have a huge amount to grow. But I don’t think the advertisers are thinking about it as being a significant percentage of their other spend on video,” said Page.

The news comes amid ongoing efforts by YouTube to boost the amount of premium content available on its site, with the first of the 100 premium channel partners that it signed last year now starting to go live.

Google does not break down earnings by division, but said that display advertising – across the web, mobile and video on YouTube – now had an annual ‘run rate’ of US$5bn. Within this, spending at its DoubleClick online display ad unit was up 130% year-on-year, according to Page.

NATPE 2012However, Google’s chief finance officer Patrick Pichette would not say whether a “material portion” of the expected US$5bn came from YouTube.

Susan Wojcicki, Google’s senior VP of advertising said that video formats were an “important factor” in terms of driving display advertising, and said that YouTube’s recently introduced TrueView ads, which allow viewers to skip in-stream pre-roll ads, meant that those who did choose to watch were likely to be more engaged.

“View rates range between 15% and 45%, and the people who choose to watch those ads are highly engaged. Over 60% of our in-stream ads are now skippable. It’s an increase of over four times since the beginning of the year,” she said.

Overall, Google said that it’s Q4 revenues were US$10.58bn, up 25% year-on-year. Profits for the quarter stood at US$2.71bn, up from US$2.54bn for the same period last year. However, both figures failed to meet analyst expectations, sending Google’s share price down by some 9% after hours.







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