Hey Mark Cuban: no one's kicking anyone's ass
I’m fed up. What’s with the general upset over YouTube’s inability to turn a profit? Either everyone’s obsessed with instant ROI or people are just jealous of YouTube’s sell to Google.
Here’s the deal: companies - strong, successful organizations with long term viability - take time to build and profit. Don’t credit Google for making a dumb purchase just yet.
In other industries, long term ROI is more often a fact of life. While everyone in the valley rides the wave and overvalues a company like Facebook, Google is treating YouTube like a sandbox, toying with different strategies to ultimately make YouTube profitable - and that’s okay.
And remember the playland at McDonald’s? Google understands the notion of brand loyalty, and I can only imagine how much web video the pre-high school demo is consuming today. The result is a legion of viewers who don’t have purchasing power now, but will eventually be that coveted 18 to 34 demo.
The bottom line is that true monetization takes patience - I don’t know YouTube’s long term strategy, but it’s clear to me that they’re ignoring the high tides in favor of more consistent, favorable waters. At a time when everyone is frantically groping for a “monetization strategy”, YouTube is building out the most robust - albeit aesthetically unappealing - video destination site. Annotations is just the latest in a long line of awesome tools that no doubt increase community engagement and time spent on site (Hulu begins and ends with text commenting).
YouTube has a loyal (or at least consistent) audience, awesome tools, and the foresight to take it slow. You can make money overnight, but you can also make money over time.