According to a new report out of The Wall Street Journal, Google’s YouTube unit posted a revenue of nearly $4 billion in 2014, but did not earn a profit of any kind. The $4 billion in revenue during 2014 is up from $3 billion in 2013. YouTube accounted for about 6 percent Google’s overall sales last year.
In an effort to remedy remaining unprofitable, YouTube is planning to launch a new ad-targeting system later this year, the WSJ says, though details remain unclear. …
The report, citing “a person with knowledge of the figure,” claims that after paying for content and distribution, YouTube broke even in 2014. Google originally acquired YouTube back in 2006 for $1.6 billion and has yet to earn a significant profit. Revenue was also slow in the early days, but recent revamped ad methods have caused the number to rise significantly.
One of YouTube’s biggest expenses recently has been paying for content. The company invests millions in creating original content and funding studios for the creators to shoot content. YouTube also heavily focuses on keeping a reliable, fast backend to deliver content to the end-user.
Analysts blame YouTube’s inability to earn a profit on poor ad-targeting methods, as well as too strong of a reliance on teen users. Google hopes, however, that YouTube will be able to earn a profit with the new ad-targeting method.
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