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ALLY MSANGI
ALLY MSANGI
@allymsangi · 18 Nov 2021
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How much money does YouTube make

YouTube, like the majority of Google's other services, generates the majority of its money from adverts. With the ability to integrate targeted advertising right into the video clips that its consumers watch, YouTube can both promote highlighted content and advertise to new users.

Since 2017, Alphabet (Google's parent company) has no longer disclosed revenue breakdowns by specific divisions, making it difficult to determine how much money YouTube generates—although the firm did produce $9 billion in sales in 2017.

When Alphabet Inc. (previously Google) (GOOG) acquired YouTube in 2006, it was a long way from profitability. Google did not acquire the business for its revenue. Google acquired YouTube because its own online video product was floundering while YouTube's traffic was exploding.

When Google acquired YouTube, widespread belief was that copyright concerns would be resolved and advertising would immediately join. Although the copyright debate continues to be a hot topic ten years later, advertising did come on strong in the beginning.

Then, as user-generated material began to flood the market on a regular basis, advertisers began to witness an overabundance of films of the wrong type of content. Advertisers reduced their rates when they returned to search advertisements that reached consumers while they were conducting research for a purchase, rather than watching a random video.

Youtube Contributes 10% to Google's Overall Revenue.

Google reports that YouTube generated $15 billion in revenue last year, accounting for nearly 10% of all Google revenue. According to these estimates, YouTube's advertising business is about a fifth the size of Facebook's and more than six times the size of Amazon-owned Twitch.

Separately, Google reports that YouTube has over 20 million paid members across its Premium (ad-free YouTube) and Music Premium products, as well as over 2 million premium TV subscribers. Alphabet said profits from those products are included in the $5.3 billion "other" category, which also includes hardware such as the Pixel phone and Google Home speakers. As a result, it's difficult to assess the precise performance of any one product included in that category.

YouTube's revenue soared 84% year-on-year to just over $7 billion.

YouTube's income nearly doubled to $7 billion in the second quarter of 2021, primarily due to a resurgence in online advertising.

On Tuesday, the video-sharing behemoth revealed a great third-quarter performance as part of parent firm Google's quarterly results report, with YouTube's overall income increasing by an astounding 84 percent year over year.

Google's primary businesses - its search engine and YouTube - rely on online advertising revenue to survive, but the COVID-19 outbreak last year caused digital marketing spend to plummet, affecting a lot of internet titans.

By 2021, however, YouTube had surpassed analyst estimates - which projected revenues would be closer to $6.3 billion - and led to Google's overall ad income increasing 69 percent year over year to $50 billion.

The Bottom Line

Youtube make money through premium subscriptions and advertisements.

However,  Youtube pulls in more user data the longer users stay in the Googleverse, which includes YouTube, and that data helps it market more efficiently across all its platforms. Google can afford to be patient while YouTube figures out how to make a profit.

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