Google (GOOG) paid something around $1.7 billion to buy YouTube, which is by a wide measure the most popular video site in the world. By some accounts, one billion videos are watched at the site each day.
According to The Wall Street Journal, YouTube revenue is only running about $50 million a quarter, which makes the buy-out seem very expensive. Google executives blame some of the poor revenue numbers on the own advertisement placement systems. But, that is only a small part of the problem.
The real drawback to YouTube as a marketing medium is its content. The most popular video of all time on YouTube is called "The History of Dance", a short comedy feature shot in resolution so poor that it is barely visible. It is cult classic for buffoons. And, it has been viewed almost 92 million times. Not far behind that is a clip of a laughing baby. The content is sophomoric and the quality of the video is hideous.
YouTube will never do well until that great majority of the heavily trafficked content is high-quality video with high-quality content. Big TV advertisers like Chevy and Bud really don’t want to be found in the company of video clips taken with cell phones and posted for the bizarre amusement of the great unwashed.
For now, YouTube is toast, at least as an ad medium
Douglas A. McIntyre
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