Maybe Google Isn't Losing Big Bucks on YouTube After All
Ever since Credit Suisse came out with a report in early April estimating that Google’s YouTube will lose as much as $470 million this year, many people have been predicting the video sharing site is doomed and calling Google stupid for continuing to run it as is.
Well, maybe not that stupid. A new report on how much YouTube costs to run concludes that Google is at most losing $174 million—no chicken feed but neither is it a figure that makes you doubt the sanity of Google CEO Eric Schmidt. The report, from RampRate, which advises companies on sourcing Internet bandwidth, content delivery, and other infotech services, makes the case that Google pays far less for bandwidth to receive and play all those videos than Credit Suisse assumed: only $49 million, not $360 million. RampRate also thinks Google’s hardware and data center costs are considerably less than Credit Suisse estimated. Here’s a comparison chart provided by RampRate: