The online-video unit posted revenue of about $4 billion in 2014, up from $3 billion a year earlier, according to two people familiar with its financials, as advertiser-friendly moves enticed some big brands to spend more. But while YouTube accounted for about 6% of Google’s overall sales last year, it didn’t contribute to earnings. After paying for content, and the equipment to deliver speedy videos, YouTube’s bottom line is “roughly break-even,” according to a person with knowledge of the figure.
But what about the cost of servers, bandwith etc? I think it might be in the range of $750 million per year to as high as $1.5 Bn plus ( we will never know as Google never reveals cost of running youtube, and Google has invested heavily in this space ). I feel Youtube as a standalone business MAY NOT be as profitable a biz as Search and might never be since barely 10% of its content is actually monetizable. But for Google, with $30 Billion revenues, Youtube losses( even if money lost is as high as say $500 million per year) is chump change considering the strategic advantage it gives visavis competition. (Microsoft online businesses lost way more last 10 years). Youtube subsidy by Google has created a monopoly which has effectively destroyed all independent video ad network business plans.
But even if you discount YouTube's multiples a bit to account for its profit uncertainty, you're still left with a very valuable business. At six times Mizuho's revenue estimate, YouTube would be worth $90 billion. At seven times, it would be worth $105 billion. And those valuation figures would rise a little more if one tacked on a slight premium (say, $5 billion or $10 billion) for the potential of YouTube's subscription businesses.
In May 2011, 48 hours of new videos were uploaded to the site every minute, which increased to 60 hours every minute in January 2012, 100 hours every minute in May 2013, 300 hours every minute in November 2014, and 400 hours every minute in February 2017. As of January 2012, the site had 800 million unique users a month. It is estimated that in 2007 YouTube consumed as much bandwidth as the entire Internet in 2000. According to third-party web analytics providers, Alexa and SimilarWeb, YouTube is the second-most visited website in the world, as of December 2016; SimilarWeb also lists YouTube as the top TV and video website globally, attracting more than 15 billion visitors per month. In October 2006, YouTube moved to a new office in San Bruno, California.
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