From your sources:
Google has been looking at new ways to make money from the popular video-sharing site. Mr Schmidt said that the company would be experimenting with new advertising formats on the site, such as pre-roll ads, to build a bigger revenue share. Google’s chief financial officer, Patrick Pichette said these new initiatives were already helping to make YouTube more desirable for customers.
“We’re really pleased, both in terms of YouTube’s revenue growth, which is really material to YouTube, and in the not long, too-long-distant future, we actually see a very profitable and good business for us,” he said.
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Hmmm, so a company that was purchased for $1.65 BILLION is not showing a profit, NOO WAY ! ! ! NEWS FLASHHHH they will be writing off losses for as long as the law allows. IF you read the whole article they go on to say that they are looking at new ways of making money and none of them apparently seem to be a fee based system.
It's also been widely reported that YouTube has had difficulty turning traditional banner advertising into cash. They have done creative things like putting links to purchase music in the video box. They also have considered pre-roll adds. So as long as you are okay with pre-roll adds (full page ad before you get to content) or somehow SnoWest can figure out how to make commission off sales of music, then it's not really a good comparison.
It's no big secret that online banner advertising is failing to pull in enough revenue. Many newspapers are considering moving to a pay model. Big Rupert has already moved the WSJ to pay, and plans to move the rest of them in the next year or so. It's hard to make the change when you've been giving it away free for so long.
I'm not saying you can't make money with ads, I'm just saying you can't pull in enough.
and from the other source:
The company says it has been profitable by one measure -- earnings before interest, taxes, depreciation and amortization, or EBITDA -- for the past five quarters. Zuckerberg reiterated Tuesday that the company expects to generate positive cash flow in 2010.
Note that they aren't going to a fee based system either and plan on showing a positive cash flow.
It is quite ironic to prove someone is wrong just by looking at their own information
That's awesome, they're profitable before they pay any expenses!
And besides, this whole comparing SnoWest to YouTube and FaceBook thing is apples to oranges. First, the pool of advertisers on those sites is much, much larger. Second, the traffic they see is insane. So let's make comparisons at 1:1. It would be a little like saying that SnoWest can charge the same price for a full page ad as, say, the New York Times.
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