YouTube was not even 2 years old before the top tech companies begin to bid to acquire the video sharing website. Google beat out other companies like Microsoft, Yahoo, and others with a $1.65 Billion offer to acquire YouTube.
10 years later I want to take a look this deal and determine whether it was a good deal or not for Google. Google does not publicly release a lot of the Financial information, so all of the numbers reported are merely estimates. The Wall Street Journal reported that YouTube generated around $3 billion in revenue in 2013 and $4 billion in 2014. This is according to two guys who are familiar with YouTube Financials. On its face, one would say Google made out very well on YouTube, but that may not be the reality. Google spends an estimated amount of $3.8 billion on infrastructure a year. Business Analysts believe YouTube is either making a small margin of profits or just breaking even.
YouTube is now creating exclusive content and offering ad-free video streaming. A new service that Google is offering now is called YouTube Red which comes at a price of $9.99 a month. This new revenue stream may be the major key to making YouTube much more profitable.
