YouTube Selling Contextual Video Ad Space Based On Keywords

Posted Nov 12, 2008

YouTube is one of Google’s most expensive ventures.  Between the acquisition price, dealing with the litigation, and managing server expenses, Google has their hands full.  Google Inc. (NASDAQ:GOOG) CEO Eric Schmidt admitted at one point that YouTube should be making more money than it actually several months ago.  Since then YouTube started linking music videos to Amazon and iTunes with a revenue sharing program.

YouTube’s newest strategy is Sponsored Videos.  This is similar to the sponsored links integrated in Google search.  Sponsored Videos ad space is available for individuals or corporations to purchase based on keywords.  YouTube already seems to be monetizing by running movie trailers on the homepage.

“In hindsight, it is a natural transition for YouTube to make. We’ve been working on this for months. The key was, we wanted to make sure we got it right. There are a lot of intricacies involved. YouTube is a video discovery platform. We’ve been integrating with Google AdWords for some time, and now we’re at a place where it can be win and win,” stated YouTube product manager Matthew Liu.

YouTube has roughly 80 million users.