When Google acquired YouTube for $1.65 billion in 2006, it became a revenue success. YouTube pays creators 55% of their ad revenue and runs data centers for over 1.9 billion users. YouTube is also profitable - it earns $2 to $3 billion per year, or around 10 percent of Alphabet's net income. However, how much is YouTube worth? Here are some estimates. Listed below are the top three most valuable companies on YouTube.
YouTube was bought by Google for $1.65 billion in 2006
At the time of the acquisition, YouTube was 18 months old, struggling to cope with copyright lawsuits, and stretching its internal resources to the limit. Google's acquisition offered them all of those benefits and more. It also gave them their own video site and the power to charge for content they deemed objectionable. In fact, the YouTube company's revenue doubled in the first quarter of 2006 compared to the same period in 2005, making Google's acquisition all the more valuable.
Before the acquisition, YouTube had no revenue and was mired in a copyright mess. The company had run out of cash and needed a partner. Google offered the site's 20 million monthly active users and its promise of aggressive growth to its investors. The price of the acquisition resulted from the interest of other bidders. The companies were locked in a bidding war for almost a year before Google made its final decision.
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It generates revenue through video ads
Until recently, the only cost associated with YouTube is the cost of maintaining its infrastructure. However, as technology improved, these costs started to come down. YouTube now enables video ads to follow embedded videos around the web, allowing them to populate at various points of viewing. Until now, YouTube has primarily relied on video ads to generate revenue, but it has also embraced other revenue streams. Here are some of the ways it uses video ads to increase its revenue.
TrueView is a program offered by YouTube that provides ad placement on the site. This program has two types of advertisements: in-stream and video discovery. In-stream ads require the viewer to watch the first five seconds of the video before skipping the rest. In addition, the supplier only pays when a user watches more than 30 seconds of the video, or if they click on an entity on the screen. Video discovery ads appear next to other content and are charged when the user clicks on them.
YouTubers earn money from sponsored videos and brand deals
Brand deals and sponsored videos have become increasingly common ways for YouTubers to monetize their channel. These deals include affiliate marketing, product reviews, and even selling merchandise. YouTubers can charge anywhere from five to ten times more than they would for a sponsored read, and they should never do a sponsored video for free merchandise. This article will cover how to make money from sponsored videos and brand deals.
Brand deals are perhaps the most lucrative way for YouTubers to monetize their channel. The brands pay the YouTuber to endorse their product in their videos, and they usually require the creator to include hyperlinks to the products they wear in their videos. Unlike television ads, YouTubers must also declare when they have a paid promotion in their videos. A video must be marked as such in the video editor to avoid any legal problems.
It's worth around $170 billion
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If you've ever seen a commercial on YouTube, you've probably noticed that it's worth around $170 billion. Founded by former PayPal employees in 2005, YouTube quickly grew to become the world's second-largest website. In 2006, Google acquired YouTube for $1.65 billion. Today, YouTube is worth more than that, according to analysts. The video-sharing website is worth more than that because it earns billions of dollars from ad revenue each year. In 2019, the company invested $8.5 billion into content acquisition.
The founders of YouTube, Steve Chen and Jawed Karim, have a combined net worth of $300 million. Jawed was born in October 1979 and is 42 years old. The YouTube founders have estimated that the video-sharing site is worth $170 billion. Their total costs to run the service are around five million dollars a month, but the yearly operating costs are much higher. YouTube's costs may be as high as five million dollars, which is why they've faced criticism over the lack of a business model. In March 2006, YouTube began using ads to monetize its site. In April, it stopped using Google's AdSense, but resumed it in some regions. As of January 2018, advertisements are the primary revenue source for YouTube.
It's owned by Alphabet
The announcement that YouTube is owned by Alphabet came as no surprise to many observers. The company's founders chose to form Alphabet as a holding company so that they could separate its divisions and sell off shares in various operating units. The new structure is supposed to streamline Google's core business, but that's hardly the case. YouTube, the company's most valuable asset, is still under Alphabet's control.
Alphabet owns YouTube, and investors can buy shares of the company in order to benefit from its success. Although the stock is not traded, it is possible to buy Alphabet stock and own shares in the company. YouTube is owned by Alphabet, the same company that owns Google and other tech companies such as Nest, Jigsaw, Waymo, Verily, Calico, DeepMind, and Fitbit. However, investors should note that investing in Alphabet could cause losses. Therefore, it is always advisable to seek professional financial advice before investing in Alphabet stock.
How Much Is YouTube Worth?
