Posted May 4, 2010 1:47 pm by with 1 comment

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Google is really almost totally on the way to eventually turning a profit on little-known video site, YouTube. (Okay, one of those phrases is an understatement.) But over the last year, reports Bloomberg, Google says they’ve increased their YouTube advertisers tenfold. Sameet Sinha, an analyst at JMP Securities LLC., says brand advertisers are returning to the site, too.

Bloomberg talked to Barry Salzman, managing director of media and platforms for the Americas at Google. YouTube has been gearing up for the resurgence of display, which CEO Eric Schmidt said in January was the company’s next focus.

To attract customers, Google has expanded an exchange that matches buyers and sellers of display ads and added tools that help small companies build their own ads on YouTube. Salzman’s teams focus on packaging display advertising on YouTube as well as Google’s content network of more than 1 millions sites.

“We have aligned YouTube with our display product offering,” Salzman said.

Bloomberg points to Google’s acquisitions of DoubleClick and Teracent (behavioral targeting) as other steps enhancing Google’s display line. Google’s Content Network is another important part of the part of the display/video equation.

Possibly the biggest challenge facing YouTube advertising is exactly what makes it so popular: its user-generated content. Many advertisers are wary of placing ads that might run next to videos that might also offend the audience. But clearly, as they expand their advertiser base, this concern is diminishing. Bloomberg reports that Google could make up to $1B in display ad sales this year.

What do you think? Is YouTube finally on its way to profitability?

  • It’s a shame those guys in Afghanistan aren’t in the revenue sharing program with Google. They’d be sending some nice checks home to their wives and kids, if they were.