By Tony Winterburn • 04 February 2020 • 8:16
YouTube CEO Susan Wojcicki announces "Stellar Revenue"
Google has reported YouTube’s advertising revenue totaled $15 billion in 2019, ending a longtime policy of keeping the video site’s financials under wraps.
The results, which Google released in its fourth-quarter earnings report on Monday, come 14 years after Google bought YouTube in a $1.65 billion acquisition.
Ads on the video site now comprise about 9% of Google parent company Alphabet’s overall revenue, which totaled $162 billion last year.
Even as YouTube has grown into a massive site, its ad revenue continues to grow at a healthy pace, increasing about 36% in 2019. That’s a much faster pace than Google’s overall ad revenue, including its search-ads business, which grew by only 16% year over year in 2019.
In the earnings report, Alphabet Chief Financial Officer Ruth Porat said the reason for breaking out numbers for YouTube, as well as Google Cloud and Google Search, was “to provide further insight into our business and the opportunities ahead.”
Even as Google disclosed YouTube’s ad revenue, it kept other key information about the business close to the vest, most notably declining to provide information on whether YouTube is profitable or not. It’s also still unclear how much YouTube is worth, since other sources of revenue were not included in the report.
To put this number in context, the $15 billion total for ad revenue means YouTube is bigger than media conglomorate Viacom (last valued at $12 billion). It’s also more than 20% of the $70 billion that went into all of US TV ad spending in 2019.
While YouTube’s popularity has exploded over the years thanks to the homemade videos uploaded to the site by users, the service also spends an increasing amount of money to acquire premium content and on the computing infrastructure to handle the traffic.
Google has also struggled to police YouTube, removing a never-ending flood of videos with hate speech, conspiracy theories, and pornography. Those efforts require increasing investments in technology and personnel, which weigh on YouTube’s profitability.
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