Citi: YouTube Has Revenue Potential of $491M
Citigroup today points out that YouTube could easily get Eric Schmidt off its back by just slapping around some cheap banner ads. If YouTube were to sell banner ads on all of its pages, it could take in $491 million in net revenue in 2009, resulting in incremental net income of $156 million, according to Citigroup calculations released in an analyst note today.
Citi extrapolated using a MySpace CPM of $1.13, a projected YouTube page view increase of 50 percent, and knocking off a 40 percent traffic acquisition cost for revenue sharing.
Citi was surprised to find that of the top 100 most-viewed videos of the last month, only 28 showed advertising, and only one of those 28 was an overlay ad. That’s because YouTube is extremely selective about interfering with its users’ experience with advertising, and only shows ads on videos from its partners. Among other things, that keeps the site safe from ever advertising against unauthorized content.
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[...] says the video-sharing site’s revenue will be less than $200 million in 2008. Last week, Citigroup said YouTube could earn up to $500 million in 2009. (Silicon Alley [...]
[...] is a good thing). But it also means tons of lost opportunity. Citi proposed widespread banner ads, estimating the company could make an additional $491 million if it were to place cheap ads on most of its [...]
[...] and needs to decide what kind of video site it wants to be. It can’t do it all. Related reading:Citi: YouTube has revenue potential of $491 millionSchmidt promises new YouTube monetization toolsYouTubers to get ad money shareHow YouTube can fix [...]
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