Peter Kafka

Recent Posts by Peter Kafka

Another YouTube Revenue Guess: $1 Billion in 2011

Since Google releases almost no information about YouTube’s financial performance, the best we can do is make educated guesses. Here’s another one: The word’s biggest video site will generate over $1.1 billion in revenue by 2011, and Google will keep about $700 million of that.

This estimate comes from Citigroup’s (C) Mark Mahaney, who notes that the site continues to grow and that it is placing more ads on more videos. No news there.

Mahaney is good enough to explain the logic behind his estimate, and it’s a fairly simple one: He takes MySpace’s revenue-to-page view ratio and applies it to YouTube (see table below; click to enlarge).

So if you want to play analyst, you can tweak Mahaney’s math based on your own assumptions. If you think Google (GOOG) is doing a better or worse job at selling ads than News Corp.’s (NWS) site, you might want to adjust the estimates accordingly.

Or if you believe YouTube generates much more traffic than comScore (SCOR) counts–and this is what YouTube’s people are fond at hinting at, though they never really come out and say it–you could tweak it again.

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik