14 DAY TRIAL // YouTube is the largest video website around. Everyone has heard of it, everyone is watching it. Direct competitors to the site are few and much, much smaller, Dailymotion comes to mind. Most people would probably think of Vimeo as a YouTube competitor, but the site is considerably smaller and caters more to the 'artsy' crowd than to webcam movie makers.
The site is also making Google billions in ad revenue, though the company doesn't disclose revenue figures for YouTube alone.
YouTube has won, no doubts about it. Google could be very contempt with what it has, try to maximize revenue and let the ad dollars pour in.
Still, to date, YouTube may not be profitable, despite huge revenue figures. Granted, a video site is expensive to run, but Google has great technology and great infrastructure.
Yet, it still pours in billions each year into YouTube. Why? Simple, because Google believes that this is just the beginning. Google doesn't want to dominate online video, it wants to dominate what people watch everywhere, it wants to channel the cable channels.
Google wants people watching movies and TV shows on YouTube, just as much as they do cat videos.
And it's spending huge amounts of money to do it. Earlier this year, rumor said that it had $100 million to spend to secure quality content for the site. With that money, you can finance several shows that would rival (some) TV shows in production quality.
But, new rumors indicate that Google may in fact be spending $500 million or even more to acquire video content for YouTube. And it's giving traditional players a run for their money.
At the same time, Google is also willing to spend big bucks on Hulu, a lot more than what the current companies wanting to buy it are willing to pay, if it can also get access to more content for a longer period.
Yet, despite the huge amounts of money thrown around and Google's huge ambitions, the company is staying quiet and you won't hear much about its moves. There's good reason for that, traditional media companies are very afraid of Google and YouTube as it is.
And Google needs, at least for now, the traditional media companies for quality content. But if it can afford to finance projects on its own, just like Netflix is doing, it may soon find itself competing with traditional broadcasters or cable networks for new shows. And Google's pockets are significantly deeper.