It has always seemed strange to me that Google become part of Alphabet, instead of vice-versa.
It seems like a much more honest approach would always have been for Google to be one company... for Alphabet to be a separate one... and for, say, Google to own 33% of Alphabet, for Larry and Sergei personally to own another 33%, and outside investors to own the rest and be the ones principally determining its own, separate valuation.
Given that Alphabet was basically Larry and Seigei's personal pet projects and the goal was for Google to fund these projects, it's easier to funnel money up instead of out.
Nope no source. I’ve tried looking as well. I assume since it costs so much in infrastructure that Google lends for free to YouTube, and that they have never been able to announce nice numbers for YouTube, ever, that it likely doesn’t make a profit or break even. Especially after accounting for all the freebies Google provides YouTube.
I guess I just have a time believing it's in the red, considering the sheer quantity of advertising they show and the fact that video hosting itself isn't all that expensive (relative to the cost of showing an ad), and even cheaper given how cost-efficient Google's datacenters are.
But also, given YouTube's astronomical growth over the past 15 years, I can also see it operating similar to Amazon -- not technically making a profit, but only because it continues to massively reinvest what would otherwise be quite profitable, for even greater future eventual profits.
Yes I guess I was thinking if Youtube isn’t a part of Google officially as a company in a proposed split, they’d have to actually pay for the Google datacenter costs. Similar to how eBay left PayPal once they split. It wasn’t worth PayPal’s prices.
So I was assuming all this with the hypothetical inclusion of the actual cost of YouTube.
I agree with the Google servers and bandwidth being essentially free, YouTube likely breaks even at least.
Yes, the amount of ads on some of the videos has grown, but overall I think the amount of money they make per popular video has shrunk significantly.
The amount of people using ad-blockers had increased a lot and there have been a lot of demonetization events where the bar for acceptable (advertiser-friendly) content has been raised. This also caused a lot of creators to move their income streams to merch or Patreon, sometimes even fully disabling advertising on their videos.
Still just conjecture, just wanted to point out that there have been a lot of things that hurt Youtube's ability to monetize despite their good growth.
I would not be shocked to hear that video encoding is actually the biggest cost of running Youtube, much more than the hosting cost itself, at least when you factor in their close connection to Google's networking infrastructure that probably brings bandwidth cost way down.
Yeah that’s why I assume almost no other company could handle running YouTube without massive losses because they won’t have the infrastructure. The two major Chinese co’s and ~5-7 American companies could probably handle running it without costs going out of control.
But no one figure out if they actually make a profit. And they themselves have never announced breaking even or profitability.
Along with that, if you take away the massive subsidies they get with Google’s infrastructure, and the money they split with music studios and makers. I don’t see profitability being the case.
It seems like a much more honest approach would always have been for Google to be one company... for Alphabet to be a separate one... and for, say, Google to own 33% of Alphabet, for Larry and Sergei personally to own another 33%, and outside investors to own the rest and be the ones principally determining its own, separate valuation.