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2010 May Be the First Year YouTube Turns a Profit

Soulskill posted more than 3 years ago | from the keep-throwing-ads-in-there-we-love-it dept.

Advertising 89

eldavojohn writes "Analysts are saying that this year will be the first year YouTube turns a profit. From the New York Times article: 'In the last year, the video site has become a significant contributor to the family business at a time when Google, which makes more than 90 percent of its revenue from text search ads, is seeking a second act. Though Google does not report YouTube's earnings, it has hinted that it is hovering near profitability. Analysts say YouTube will bring in around $450 million in revenue this year and earn a profit. Revenue at YouTube has more than doubled each year for the last three years, according to the company.' Of course a little over a year ago we were being told that YouTube was losing around $1.65 million each day. Regardless, when you pay $1.65 billion for a business, you probably don't expect it to take three to four years before you start making your money back."

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89 comments

Google looks to the future (5, Insightful)

Anonymous Coward | more than 3 years ago | (#33470156)

Regardless, when you pay $1.65 billion for a business, you probably don't expect it to take three to four years before you start making your money back.

This is why google is eating everybody's lunch. Thinking this far is a good thing when you are able to double revenues year over year. Not a bad long run strategy.

Re:Google looks to the future (1, Funny)

MrEricSir (398214) | more than 3 years ago | (#33470256)

This is why google is eating everybody's lunch.

Mommy, Google stole my lunch money!

Re:Google looks to the future (0)

Anonymous Coward | more than 3 years ago | (#33472274)

Go back to bed, Mr. Ballmer. You'll need lots of sleep to heal that bump on your head. Just remember not to throw chairs at acrylic windows again, okay?

Re:Google looks to the future (1)

rtb61 (674572) | more than 3 years ago | (#33472602)

Lets be honest a far better strategy would have to get google video to beat youtube not to buy it. Consider this, Google management didn't think they would be able to beat youtube even if they invested $1.65 billion into google video. Personally I think the purchase had more to do with google's management not wanting to appear as losers versus youtube management, for google to buy youtube was to admit defeat.

Video is now sourced from many sites. Google's lack of income out of youtube points to it's anti-net neutrality conspiratorial deal with Verizon ie will google cripple video search (censor google search) in order to promote it's copyright distribution income and seeks to ensure this by hampering bandwidth from competing video content sites.

Underlying all of this, was the main reason to pay so much for youtube at that time was to create a false impression of the value of low income web sites in the investment market in order to promote google's own perceived value. After all google basically printed the money for the purchase by simply issuing more shares.

Google all powerful? Lost in social media, lost in video, no big winner in email, so only really wins in search. Now search is under threat now that M$ is throwing out Ballmer's bullshit and waking up to the fact that have to do the hard yards over years to gain market share ie their new street view (haven't used it not interested in dicking around with silverfish).

Re:Google looks to the future (1)

RoFLKOPTr (1294290) | more than 3 years ago | (#33472884)

Google all powerful? Lost in social media, lost in video, no big winner in email, so only really wins in search.

Not lost in video... just because they -- as you say -- admitted defeat by purchasing YouTube doesn't mean they lost. They now own YouTube, the largest video sharing site on the planet and only growing farther, so they win there. Yes a big winner in email... all the time I see people I know switching to Gmail from Yahoo, Hotmail, whatever, and I know that I wouldn't use any other email service. Yeah, kinda lost in social media to a degree -- at least in the US. Orkut is huge in South America, and YouTube and Google Talk could be considered social media, both of which are huge (Gtalk isn't as huge as AIM/WLM/Skype, but it's not unknown).

There's also the huge developments that Google has been making over the years that we're hearing about. Google Voice is amazing. Sure it's a result of an acquisition, but the new Voice is a major improvement upon the old GrandCentral that they purchased. Wave was also a major breakthrough. That software itself wasn't really useful for much, but the technologies behind it can be used in so many different applications that the time spent on that program was well worth it. Calendar is awesome, and online... any other good online calendar applications you know of? I don't. I assume that Windows Live has one, but I've never really heard anything about it.

Then there's Google Chrome, which is not being developed with the goal of gaining market share. Chrome's sole purpose is to push the limits of Javascript processing speed and be a competitor to the rest. Google's services all heavily rely on Javascript and Ajax, which means they all benefit from better Javascript engines. Current browsers at Chrome's release just weren't cutting it, so Google had to go give them some incentive to kick it up another notch. People want a faster browser, and Google wants people to have a faster browser. Whether that browser is Google's does not matter to Google, but people will go to Google's if the other browsers aren't as fast, and other browsers don't want to lose market share, so they speed up their browsers. All of it benefits Google and their services. Higher market share of Chrome is just another number that doesn't really matter but is still one more thing they can use to please shareholders.

So it's not about "winning". It's about being the best. "Admitting defeat" by making acquisitions still means they made the acquisitions and now own those that "defeated" them, which means they still win. It's simple business strategy, really. Just at a magnitude several billion dollars more than I could ever imagine having under my control.

Re:Google looks to the future (1)

AHuxley (892839) | more than 3 years ago | (#33473112)

I feel the real deal is in ip tracking, ads and real time feedback to customers and about the interests of consumers.
Google does not care whats on youtube, they care about what your searching for.
MS seems to be dreaming of a percentage of life itself, from medical, entertainment, finance, just in time solutions, robotics, DRM ect.

Re:Google looks to the future (1)

drsquare (530038) | more than 3 years ago | (#33474312)

It's a sad comment on modern capitalism that four years is considered long-term thinking.

Google's in it for the long haul.... (5, Insightful)

LostCluster (625375) | more than 3 years ago | (#33470162)

In the .com error days, people valued money-losing Internet companies as if they would gain market share and be able to raise prices in the future. Most failed at doing that, and the bubble burst.

But Google has this insanely profitable AdWords business, and therefore can fund a money-loser and work the ads in slowly... which is exactly what they did with YouTube. Look out phone companies, you're next.

Re:Google's in it for the long haul.... (3, Insightful)

FuckingNickName (1362625) | more than 3 years ago | (#33470266)

But Google has this insanely profitable AdWords business

If only the Mozilla Foundation had the balls to include an ad blocker which dealt with Google Adwords, perhaps we'd start to see an Internet funded by people willing to pay for (or share) quality content rather than an Internet funded by advertisers pushing crap to the lazy and easily persuaded.

Re:Google's in it for the long haul.... (3, Insightful)

easterberry (1826250) | more than 3 years ago | (#33470308)

...perhaps we'd start to see an Internet funded by people willing to pay for (or share) quality content...

Ask the games and music industry how that's working out for them...

Re:Google's in it for the long haul.... (1)

pspahn (1175617) | more than 3 years ago | (#33470392)

I think quality was the operative word there.

Re:Google's in it for the long haul.... (1)

Fumus (1258966) | more than 3 years ago | (#33471216)

Lately, games you PAY for include "unobtrusive" ads anyway.

Re:Google's in it for the long haul.... (1)

Patch86 (1465427) | more than 3 years ago | (#33473868)

Seeing as the games industry is still experiencing year-on-year growth almost every single month, I'd say that it's working out pretty well for them...

Re:Google's in it for the long haul.... (1)

tftp (111690) | more than 3 years ago | (#33470312)

If only the Mozilla Foundation had the balls to include an ad blocker which dealt with Google Adwords

Something like http://www.optimizegoogle.com/ [optimizegoogle.com] ?

Re:Google's in it for the long haul.... (1)

LostCluster (625375) | more than 3 years ago | (#33470362)

Mozilla's on the take... they get paid for featuring Google as the default search engine in Firefox. Besides, Google would be able to get around any attempt to block their ads totally... they've got ways to make them indistinguishable from content.

Re:Google's in it for the long haul.... (1)

Threni (635302) | more than 3 years ago | (#33470544)

Plus Firefox is on the way out. Let's hope for their sake it doesn't take them another 4 years to finish their mobile version...and that they manage to speed it up and slim it down below 20 megs.

Re:Google's in it for the long haul.... (1)

epine (68316) | more than 3 years ago | (#33470606)

Besides, Google would be able to get around any attempt to block their ads totally... they've got ways to make them indistinguishable from content.

The day Google ad content becomes indistinguishable from the neo-Trotskyite content I enjoy perusing on aldaily.com (until my eyes glaze over) is the day I pull my plug on the grid and run for the hills.

Ad content has that new car smell, and I think it always will. I don't think a new-car-smell detector is much harder than breaking a CAPTCHA. Unfortunately, anticonsumers seem to lack the motivation and organization of rummy ex-physicists on the make so the problem gets less quality attention.

Re:run for the hills. (1)

TaoPhoenix (980487) | more than 3 years ago | (#33475844)

"The day Google ad content becomes indistinguishable from the neo-Trotskyite content I enjoy perusing on aldaily.com (until my eyes glaze over) is the day I pull my plug on the grid and run for the hills."

Challenge Accepted!

---

As often, RandallMonroe of XKCD has provided a jumpgate.

http://www.xkcd.com/788/ [xkcd.com] (All rights reserved to Randall Monroe, used for educational purposes only.)
The Carriage
"Because I could not stop for death, he kindly stopped for me. The carriage held but just ourselves ... ((Action sequence)) ________________________"

In that blank is an ad.

By the time you have seen the Ad Exposure, you cannot un-see it. Therefore, the ad wins. With that New-Carriage Smell you have come to lust for.

Re:Google's in it for the long haul.... (2, Insightful)

e4g4 (533831) | more than 3 years ago | (#33470870)

If only the Mozilla Foundation had the balls to include an ad blocker which dealt with Google Adwords

I like Google AdWords. Well, perhaps it's better to say that I don't dislike them. They are unobtrusive, easy on my battery/processor temp, and occasionally useful. I see no reason to block them.

Re:Google's in it for the long haul.... (3, Insightful)

vux984 (928602) | more than 3 years ago | (#33471470)

I like Google AdWords. Well, perhaps it's better to say that I don't dislike them. They are unobtrusive, easy on my battery/processor temp, and occasionally useful. I see no reason to block them.

The ads themselves don't bother me. The fact that virtually every website I visit reports to google that I went there does. Sometimes it feels like I might as well be browsing through a google proxy, and just feeding them every url I visit as I go there. This is what they want. And adwords is ubiquitous enough that it almost gives it to them. Add in gmail, youtube, and the other g-services, and google analytics on the backend on a lot of sites that don't have ads and... they are closer than you think.

I find that offensive. I don't want to be stalked and everything I do recorded by google. And googles reply is essentially... "we're not singling you out" doesn't imrprove my view of it. Just because they are using the technology to stalk everyone at once doesn't change anything... if anything it just makes it worse.

Re:Google's in it for the long haul.... (2, Insightful)

Ash Vince (602485) | more than 3 years ago | (#33474170)

The ads themselves don't bother me. The fact that virtually every website I visit reports to google that I went there does. Sometimes it feels like I might as well be browsing through a google proxy, and just feeding them every url I visit as I go there. This is what they want. And adwords is ubiquitous enough that it almost gives it to them. Add in gmail, youtube, and the other g-services, and google analytics on the backend on a lot of sites that don't have ads and... they are closer than you think.

I find that offensive. I don't want to be stalked and everything I do recorded by google. And googles reply is essentially... "we're not singling you out" doesn't imrprove my view of it. Just because they are using the technology to stalk everyone at once doesn't change anything... if anything it just makes it worse.

You are singling google out though. Every advertising company does this sort of crap. And the battle against any advertising was lost years ago, mainly becuase too many people actually buy stuff as a result of adverts.

The only thing I try and remember is that the adverts I am bombarded with are used to finance me getting a free service. If Google moved away from an advert supported model they would have to charge a subscription to voder their costs. Since I use Google a lot this would cost me a fortune.

Re:Google's in it for the long haul.... (1)

vux984 (928602) | more than 3 years ago | (#33476476)

Every advertising company does this sort of crap.

Google is different.

Google controls 70% of the online ad market. That, by itself puts it in its own category. Everyone else from Microsoft and Yahoo on down fights over 30%. Google also has 66% of the search market.

The difference between living under surveillance and not is one of degree. Getting caught on some guys camera on the way to work is not surveillance. Having that guy setup 100,000 camera's in the city and watch me as I move around is.

The other advertising companies may be -striving- for surveillance -- but even if yahoo, aol, and msn split the 30% without any other players they only have 10% of the market. I'm fine with the reach of a company being around 10%.

70% is something completely different.

Re:Google's in it for the long haul.... (0)

Anonymous Coward | more than 3 years ago | (#33472054)

What's the point? Just use NoScript. It's a quick fix and takes care of the rest of the ads too. Better to do that than to spark some stupid browser-webmaster-corporate war.

Re:Google's in it for the long haul.... (0)

Anonymous Coward | more than 3 years ago | (#33472162)

Except 99.99% of people don't want to pay for content, so you have to live with the ads. The free, ad-supported internet is here to stay.

Re:Google's in it for the long haul.... (1)

unixan (800014) | more than 3 years ago | (#33472956)

If only the Mozilla Foundation had the balls to include an ad blocker which dealt with Google Adwords

Do I detect a non-user of AdBlock Plus [mozilla.org] ? It's been featured on the Privacy & Security [mozilla.org] page of addons.mozilla.org for ages now, and occasionally featured on the front-page as well.

Yes, it works just fine with Google text-based ads, too. I haven't seen them in months.

Re:Google's in it for the long haul.... (1)

Caetel (1057316) | more than 3 years ago | (#33475136)

Considering Mozilla rely on Google for revenue, pissing them off probably wouldn't be in their own best interest.

Google's view is not just long term.... (1)

tpgp (48001) | more than 3 years ago | (#33471032)

Google's aims in buying youtube were not just long term, but also wide/strategic.

Owning youtube puts them in a position where they get to decide what the next well supported steaming video codec will be. If they didn't have youtube, they would be in a position where Apple or Microsoft could lock them out of video ads - particularly on the mobile front.

Re:Google's in it for the long haul.... (0)

Anonymous Coward | more than 3 years ago | (#33471556)

I never knew youtube had ads until a month or two ago when someone mentioned it in passing, turns out my local dns rule that blocks *.doubleclick.net stops all youtube ads too. Fancy that.

Re:Google's in it for the long haul.... (1)

owlnation (858981) | more than 3 years ago | (#33471572)

But Google has this insanely profitable AdWords business, and therefore can fund a money-loser and work the ads in slowly... which is exactly what they did with YouTube. Look out phone companies, you're next.

That's true, sort of. If they had stuck with adwords that would have been completely fine. That's not, however, what they did. Over the course of a year Youtube has gone from being usable, to completely unusable for me. Flashing ads, ads that pop up over the video content, animated gifs and all sorts of other crap that make it near impossible to watch the actual video playing.

It's also no longer possible for me to load video at all in Firefox, I have to use Safari. I know it's probably some setting in adblock that's preventing the video loading. I could change this, but honestly it's easier just not to ever use Youtube again.

A BIG part of Google's do no evil mantra, was not having invasive ads. This has been completely thrown out with Youtube. Sure it's profitable, but it's no less evil than Yahoo and many others.

Personally, I'm not supporting it. I'm simply not using Youtube. I'm sure I am not alone. To my mind this is evil, and it's a sign that Google will compromise their values for profit.

Re:Google's in it for the long haul.... (1)

h4rm0ny (722443) | more than 3 years ago | (#33473516)


I wouldn't say that YouTube has become "unusable" for me, but it's certainly become really fucking irritating. I spend half the time I'm watching something on YouTube irritatedly clicking to get rid of some add that's just popped over the bottom 20% of the video.

Re:Google's in it for the long haul.... (1)

EdIII (1114411) | more than 3 years ago | (#33477126)

That's your experience as a user. It's far worse when you are company and/or developer forced to use YouTube as a business model.

It's like a twisted horror movie with the psycho asking you to choose between the life of your daughter and your wife. A bit melodramatic, but YouTube is really driving a lot of us crazy.

Of course, some will say that you have a choice. Not really. Those developers who create sites that only work in Firefox, or even Safari, and then arrogantly state that IE's malfunctions are not their problem have failed and will never make it in the real world.

YouTube is much the same problem for a large number of businesses right now. They want the benefit of an enhanced online presence and integration with social networking, etc., blah blah blah.

YouTube has tremendous market share and brand awareness. As a business it's nearly impossible to ignore that if you are going to be putting content out there. Ignoring YouTube is not always possible, and as a developer I don't have a choice but to "just figure it out".

What I hope is that the profit is dumped right back in to development. The YouTube API offers some functionality, but it really needs some polishing and extra work. We developers have serious challenges right now with getting YouTube to work with automated systems to allow scalability. From my perspective the API development team is not being given the resources and access it needs to get the job done.

Somebody at Google needs to take this seriously and put more resources towards this. My feeling is that because it is free they are taking a lackadaisical approach, and it is the businesses that are being made to suffer for it.

What they need is a fully mature API designed to service businesses and their needs. After all, the average YouTube user will never even use an API to upload a video. A business will need to do so constantly. The current state of the API is far from optimal, and in many ways simply could not last a day if it were a paid for service.

On that note, YouTube would have probably been profitable a lot earlier had it catered towards businesses with a fully mature API. I know with certainty of a few business that would happily pay thousands of dollars a month to have their content hosted on YouTube, ad revenue sharing or not, just to get better service, better development, and better access.

I could name a half-dozen competitors to YouTube in this regard with fully matured API that beat YouTube hands down in just about every area from marketing, syndication, statistical analysis, video processing, etc. Unfortunately, I bet you may have heard of maybe 1 if I am lucky.

Once again, YouTube's early entry in to the market, and Google supporting it's losses created a substandard video service (compared to business offerings) that has excellent market share and brand awareness.

You don't like YouTube as a user? Be happy that you have a choice to close the browser window.

Re:Google's in it for the long haul.... (1)

Arancaytar (966377) | more than 3 years ago | (#33471724)

Look out phone companies, you're next.

"Please wait a few moments while we connect your call. In the meantime, here is a message from our sponsors." ;)

Re:Google's in it for the long haul.... (0)

Anonymous Coward | more than 3 years ago | (#33473342)

This form of phone advertisement has been around. Before 2000 in Sweden.

Re:Google's in it for the long haul.... (0)

Anonymous Coward | more than 3 years ago | (#33472918)

But Google has this insanely profitable AdWords business, and therefore can fund a money-loser and work the ads in slowly... which is exactly what they did with YouTube. Look out phone companies, you're next.

How times changed. Microsoft did the very same thing, using insanely profitable Windows+Office business to fund money-losing forays into other market sectors (and incidentally destroyed many companies in those markets), and we called MS evil for doing that. But now, /.ers applaud Google for doing exactly the same thing.

"Do no evil", yeah, such great marketing slogan. /.ers swallowed it hook, line and sinker.

I'm sure Google knew what they were getting. (3, Interesting)

FooAtWFU (699187) | more than 3 years ago | (#33470168)

It's not like Google didn't know what they were getting themselves into. I'm sure they're doing just fine over there.

Re:I'm sure Google knew what they were getting. (1)

Confusador (1783468) | more than 3 years ago | (#33470828)

Yeah, I'm pretty sure when you buy a business that's losing money hand over fist you expect it to continue doing so for a while anyway. I didn't see anyone at the time postulate that they were picking it up for the revenue.

How is youtube revenue different from ad revenue (0)

Anonymous Coward | more than 3 years ago | (#33470172)

The only monetization I see on youtube is advertisements, either as overlays or lead-ins to real content.

Music (4, Interesting)

MichaelSmith (789609) | more than 3 years ago | (#33470180)

I run linux so I can't use itunes, which partly blocks me from buying music on line. Lately if I want to listen to a track I search for it on youtube and watch a video. Once a week I seem to spend an hour or so clicking through links from one video to another. Youtube has a fantastic collection of early Kate Bush demo recordings.

I bet they charge a lot of money for targeted adds on videos. Google knows my wife wants to buy a new car...

Re:Music (5, Insightful)

h4rr4r (612664) | more than 3 years ago | (#33470234)

Amazon sells pretty much everything too, and 7digital, the company behind the ubuntu music store, is another great choice.

Re:Music (0)

quercus.aeternam (1174283) | more than 3 years ago | (#33470314)

The first -and last- time I got music from amazon, I discovered that it used a special windows client.

The situation may have changed, but unless it has, amazon is not in the running.

Re:Music (1)

smegmatic (1145201) | more than 3 years ago | (#33470592)

it has a linux version. i've been using it for years. http://www.amazon.com/gp/dmusic/help/amd.html [amazon.com]

also, some linux media players are integrating the amazon mp3 store directly: http://abock.org/2010/07/13/amazon-mp3-store-in-banshee [abock.org]

Re:Music (2, Informative)

Wowsers (1151731) | more than 3 years ago | (#33471538)

it has a linux version.

Yes, but it's only 32bit, and if you want to install it on a 64bit version, you will be shocked at how much 32bit crap it wants to drag into your nice clean 64bit system..... all for a crummy downloader. I passed at the opportunity to mess up my system more (Skype was bad enough but at least that is useful).

Re:Music (0)

Anonymous Coward | more than 3 years ago | (#33477824)

Check out clamz: http://code.google.com/p/clamz/

Re:Music (0)

Anonymous Coward | more than 3 years ago | (#33471078)

There is an Amazon MP3 app in the Android store, which comes pre-installed in Cyanogen.

Re:Music (3, Informative)

crow (16139) | more than 3 years ago | (#33470242)

And if you save them, and dump the sound track with mplayer, you usually end up with a nice 128kbps MP3.

Re:Music (2, Insightful)

SiMac (409541) | more than 3 years ago | (#33470658)

And if you save them, and dump the sound track with mplayer, you usually end up with a nice 128kbps MP3.

Well, you end up with a 128 kbps MP3, but it's not usually too nice because YouTube compresses the hell out of audio. Depending on the source material, parameters used, and your ears, you may or may not care, but it's hard not to notice. I am pretty sure that YouTube does this for a reason.

Re:Music (2, Interesting)

Kerrigann (1401847) | more than 3 years ago | (#33472088)

If there's an mp4 HD version of the video, and you dump (not re-encode) the AAC audio it can actually sound pretty good.

I'm assuming mp4 on youtube is always h.264/AAC, which it seems to be. Sometimes an flv video will also have AAC audio, but it's usually, like you said, compressed as hell.

Re:Music (1)

pspahn (1175617) | more than 3 years ago | (#33470446)

Try eMusic.com [emusic.com] . DRM free, Linux client, tons of music, and no major label garbage.

Re:Music (2, Informative)

vadim_t (324782) | more than 3 years ago | (#33470810)

And they sell their data to spammers, unfortunately.

I registered some time back with an emusic@domain.com email address (I make a new alias for every website), and regularly get spam mailed to it. And I don't mean emusic advertisements, or even some sort of partner thing. It's viagra and xanax spam.

I only went as far as getting a trial account, and due to this will never go any further.

Didn't happen to me... (1)

FatSean (18753) | more than 3 years ago | (#33470912)

I've been their customer since they opened their doors and I never got any spam. Are you sure it wasn't a lucky guess of a valid email address by the spammers?

Re:Didn't happen to me... (1)

pspahn (1175617) | more than 3 years ago | (#33470936)

I stopped my subscription a year or so ago because I wasn't using it enough, but I too wasn't getting spam related. But, then again, my inbox is pretty well trained by now so I almost never see spam anyway.

Re:Didn't happen to me... (1)

KingAlanI (1270538) | more than 3 years ago | (#33472474)

I've never noticed any spam from them, but I stopped simply because I wasn't using the subscription enough. What eMusic needs is for the credits to roll over month-to-month

They *do* have *some* stuff controlled by major labels, but their availability seems a bit hit-and-miss on both that and indie stuff I was looking for

Re:Music (1)

mattack2 (1165421) | more than 3 years ago | (#33471386)

and no major label garbage

Translation: No music that the vast majority of people want to listen to.

Re:Music (1)

pspahn (1175617) | more than 3 years ago | (#33471632)

/. != Vast majority of people

I've found a lot of good music from eMusic that I would have otherwise not known about. And they are bands that play shows at any of the many music venues near where I live. They are also the kinds of bands that have no qualms about putting their live shows online, for free [archive.org] .

Re:Music (0)

Anonymous Coward | more than 3 years ago | (#33470456)

http://www.amazon.com/gp/dmusic/help/amd.html?ie=UTF8&forceos=LINUX&ASIN=&isTrack=&forceDeluxeUpgrade=0&redemptionToken=

Re:Music (0)

Anonymous Coward | more than 3 years ago | (#33470760)

Try running a real OS and you won't have this problem.

Profit != Money back (3, Insightful)

e065c8515d206cb0e190 (1785896) | more than 3 years ago | (#33470182)

I assume that profit is "revenue - operational cost", i.e. "advertising - server farm".

That's very different from "getting your money back".

Re:Profit != Money back (1)

MichaelSmith (789609) | more than 3 years ago | (#33470220)

I assume that profit is "revenue - operational cost", i.e. "advertising - server farm".

That's very different from "getting your money back".

On the other hand there is "not losing ad revenue to video streaming sites".

Re:Profit != Money back (0)

Anonymous Coward | more than 3 years ago | (#33472654)

On the gripping hand, there's expecting your company to exist past the next quarterly report, in which case you have some future date where you expect to "get your money back".

Stay Informed (1)

Smidge207 (1278042) | more than 3 years ago | (#33470212)

Slashdot has long been a significant source of daily news for the tech community (dupes, typos, trolls and all). Over the past year, however, I’ve noticed a gradual decrease in its importance as a source of information. Others around me have echoed similar thoughts, so I gathered some statistics to see if this is a growing trend.

Without access to long-term Slashdot usage metrics, I looked at the number of comments per story for the last 7 years by writing a few scripts to walk through the Slashdot daily archives, cache them locally, parse the data and then generate a file with the output. Here are the initial results:
Monthly average comments per story
Monthly average comments per story

The yellow period in the data is due to Slashdot wonkiness. That range of time doesn’t return the usual filtered count (usually the filter is 3) without being logged in, and the overall comment counts are drastically lower than the trend, so I removed it from any conclusions.

There appears to be fairly significant falloff of average comments per story at the beginning of both 2004 and 2005. I also graphed the output of each day’s average comments per post as an xy scatter, reflected below with a trendline.
Daily average comments per story
(Polynomial trendline, order = 4)
Daily average comments per story

Note that the count for 9/11/2001 is not drawn (but included in the calculations), as it is exceptionally large.

This second graph reinforces the initial observation that community activity is on the decline.
Why is this happening?

The habits of those around me indicate that the decline in Slashdot activity is due to the following:

        * Broad adoption of RSS
            Feeds are ubiquitous, and the result is that everyone can easily customize their daily information exposure — much more precisely than CmdrTaco and the boys can.
        * Emergence of social applications
            Yep. Web2.0 apps are killing Slashdot. Relying on the community to process information relevance for individual consumption is a hell of a lot more efficient than Slashdot’s closed door approach (open source indeed). Sites like digg.com and the del.icio.us/popular are far more reliable indicators of what is being talked about.

See Digg Just Might Bury Slashdot at wired.com and The Rise of Digg.com on Slashdot.
What does this mean?

Each of the above linked stories suggest that users are relying on digg for timely information, and go to Slashdot when they want insightful commentary (digg and del.icio.us are for tuning in, Slashdot is for participating). This would imply a drop-off in visitor traffic, but not necessarily community activity (which we obviously see is happening). A sustained decline in both traffic and participation would be bad signs indeed.

If the pool of comments continues to drop, I suspect the signal-to-noise ratio will take an unfavorable turn. If Slashdot can’t do fast, and if it has no community, what remains?

I’ll to continue to track comment activity every few months to see if the trend continues.
  Browser-based light table
iPhoto-like image resizing using Javascript
30 Responses to “Is Slashdot dying?”

      1.
            Dennis Forbes says:
            December 21, 2005 at 11:53 am

            The continual pimping of Digg is ridiculous – not only is it late to the party (a lot of sites did what Digg does far before it), but now that it’s in the sights of spammers, the quality of stories on the “front page” have quickly degraded to terrible (yes – there are people obviously scripting “Diggs”, as some unbelievably bad stories have had hundreds of Diggs). I don’t CARE what the groupthink is pushing today, or what meme all of the lame sheeples are going to parrot – I care what a very small subsection of experts and peers consider interesting. Of course I’m not describing Slashdot either, but Digg is no closer to that goal. It’s just gross groupthink in action.
      2.
            dep says:
            December 21, 2005 at 12:14 pm

            I disagree almost with everything Dennis Forbes says above.
      3.
            spaulding says:
            December 21, 2005 at 12:25 pm

            Dennis – THANK YOU! Exactly!

            ” I don’t CARE what the groupthink is pushing today, or what meme all of the lame sheeples are going to parrot – I care what a very small subsection of experts and peers consider interesting. Of course I’m not describing Slashdot either, but Digg is no closer to that goal. It’s just gross groupthink in action.”
      4.
            Desmond Majestic says:
            December 21, 2005 at 12:27 pm

            I, too, disagree with Dennis. Digg isn’t replacing slashdot, it HAS REPLACED slashdot in my book.

            I want a big fat firehose of a link source. I don’t want some arbitrary group of people filtering it to a narrow set.

            Digg is just such a site. It, supplemented with a few linkblogs like kottke and waxy.org provide me with all the chewy link goodness I need.

            The “Groupthink” of digg isn’t perfect, but it’s enough of a lameness filter for me. I even read the queue.
      5.
            Funky says:
            December 21, 2005 at 12:37 pm

            Who cares really, I don’t want digg or Slashdot to go away, they are both really cool sources of information.

            “Digg is better than Slashdot! NANNY NANNY POO POO!”

            Whatever.
      6.
            Karl Prigge says:
            December 21, 2005 at 12:43 pm

            It is my contention that Slashdot will always be around, for it is an institution in the geek community. Despite all the recent hype that sites like digg and reddit (I’m a bit surprised that you left reddit out of this) are getting, Slashdot still has a loyal following unwilling to jump ship for a site bloated with 13-yr-olds (digg).

            The masses will always be able to find information faster, but will it always be worth reading? I think not.

            This is where I hope filtering will come insomething I know reddit is currently doing and digg planning on emulating.
      7.
            Matt Sletto says:
            December 21, 2005 at 12:43 pm

            I don’t think measuring the comments is an accurate measure of whether or not slashdot is dying. I read slashdot but I rarely leave or read comments. I just don’t think its worth reading through hundreds of comments that have little to do with the the story. Slashdot discussions go off on such stupid tangents, I gave up even trying to keep track of banal minutae of geek bullshit.
      8.
            Arthur Davidson Ficke says:
            December 21, 2005 at 12:44 pm

            I was thinking of plotting exactly this sort of graph just to see if what seemed to be happening was actually the case. Still, I’m not sure if it reflects the amount of traffic Slashdot is getting or simply people waking up to the fact that both the posting of and reading of comments is a waste of time.
      9.
            epluribusunum says:
            December 21, 2005 at 12:47 pm

            I still visit Slashdot all the time, I just don’t bother commenting anymore because I never get any mod points when I do.
    10.
            Doug says:
            December 21, 2005 at 12:50 pm

            Yep. Digg has replaced /. in my book. It is my daily source.
    11.
            idi says:
            December 21, 2005 at 12:54 pm

            Digg is no replace for Slashdot and never will be!
            Slashdot has professional and qualtiy articles on daily basis which Digg lacks of and if they have some articles those are still terrible and very messy.
            Digg is a Fun based link base with terrible articles!

            It wont care me if Digg goes down, but I hope that Slashdot wont !
    12.
            Brian Jones says:
            December 21, 2005 at 1:02 pm

            As long as there are 15-year-old script kiddie wannabes who type *only* in hackspeak, Slashdot will be there to insure that their voices are heard, for whatever it’s worth.
    13.
            Eject says:
            December 21, 2005 at 1:03 pm

            Slashdot it’s one of the best, you could have really good conversation there with smart people, as for Digg – look at the comments.
    14.
            NoForbes says:
            December 21, 2005 at 1:03 pm

            Dennis Forbes, i dont care what your “subsection of expert nerds think”. Im 99% percent sure it would be something stupid like “optimization of linux kerneal by .00009 percent. ” and then you get in a fight with dep, explaining that “.000091 percent optimization is not efficient.”

            if you dont like digg, go digg find your “expert stories” somewhere else.
    15.
            jb says:
            December 21, 2005 at 1:05 pm

            Dennis – I agree that the quality of what comes through digg is pretty low (this post being a perfect example ; ).

            I personally do not use digg much, and still rely heavily on slashdot. The better alternative to digg for me is delicious/popular, as it’s the product of individual habits (bookmarking) and not a concerted effort to promote something to the rest of the community.

            The post was written as a set of observations that were concerning. I certainly hope slashdot remains the tech news constant it’s always been.
    16.
            SnoopDougEDoug says:
            December 21, 2005 at 1:10 pm

            I read them both–almost always through an RSS aggregator–and rarely comment. Slahdot will never go away. Digg is interesting, but a bit too “look at how neat I am”. If you are cool, saying you are cool obviates your contention. Sorta like being told repeatedly “We are winning the war”. Stop it.
    17.
            cts says:
            December 21, 2005 at 1:15 pm

            I agree with Karl Prigge. Yes, digg usually breaks stories first, but only then in-between breaking stories about “Best Flash Pool Game Ever!” (1068 diggs mind you). Because that IS what I’m interested in as a professional. I’ve noticed a decline in *quality* stories on digg in the past few weeks alone. Slashdot is a collection of stories and following discussions. Digg is a collection of stuff, some of which manages to be interesting. I will continue to use both regardless as I don’t see them performing the same service.
    18.
            Trin says:
            December 21, 2005 at 1:31 pm

            For me it is feeds that are affecting Slashdot. I read both Digg (via feed) and Slashdot, never commenting on Digg and rarely on Slashdot. It is very rare that I find any new science/tech news stories on Digg, finding them via tech feeds first. Instead I primarily use Digg for those ‘fun’ stories – flash games, videos, and trivia – since its comments are worthless. I continue to use Slashdot for the rare stories I miss and the insightful/interesting comments available on stories I care about.
            Unless the high karma slashdot community does significantly diminish, I don’t expect it to go anywhere; whereas Digg feels like a social experiment with nothing to insist that it must stay.
    19.
            Brian Mingus says:
            December 21, 2005 at 2:33 pm

            There is no such thing as “fairly significant” in statistics.
    20.
            Preston says:
            December 21, 2005 at 2:39 pm

            “Slashdot has professional and qualtiy articles on daily basis which Digg lacks of and if they have some articles those are still terrible and very messy.”

            You’re kidding, right? Slashdot’s articles are either wrong headlines, dupes, reposts of stuff that was on Digg the day before, or big editorials that don’t belong on the front page of a “professional” tech news site, such as poor little CmdrTaco complaining for seven paragraphs about not being able to use his nick in World of Warcraft because it’s against the rules to use a title in your name. SEVEN PARAGRAPHS!
    21.
            Pol says:
            December 21, 2005 at 3:22 pm

            One thing to say to this: http://diggdot.us/ [diggdot.us]

            That’s replaced my homepage. It’s all I need (granted there is some duping, but I don’t care much).
    22.
            nicolas says:
            December 21, 2005 at 8:46 pm

            nice grap and interesting thoughts.

            btw: what tool did you use, to draw the graph and the pattern?
    23.
            cw says:
            December 22, 2005 at 2:39 pm

            indeed, what did you use to create your graphs?
    24.
            jb says:
            December 22, 2005 at 2:44 pm

            They were initially created in Excel (for OS X), then moved into Photoshop for a little cleanup. The XY-scatter is almost as-is from Excel, but I did redraw the line graph.
    25.
            Joe Smith says:
            December 22, 2005 at 11:01 pm

            Loved your article and graphs. I’m a quant so I really dig your methods. Your charts are so lively that I wish you would post a “how to” for us online. In my blog post about your post I say that your graphics look “Web 2.0ish”. Excellent!

            >> Article shows Slashdot is dying using extremely cool graphs!
    26.
            Anunnaki says:
            January 4, 2006 at 4:37 pm

            I think when Sites like DIGG came up, they provided a place for people that they could more easily understand thatn what is being presented at /. *g*

            Diggs overall quality is pretty low compared to Slashdot, and even in the comments section you can see the difference

            at slashdot, you have to think more – dont want to sound arrogant but its what I think. The web is more casual than intellectual for most people, at least in what they are looking for

            but it shouldnt matter. Heise’s Telepolis (mostly german) never has had a large amount of readers and its been around for a long time anyway

            slashdot is just loosing the poeple that came there because of the lack of simplier alternatives but this doesnt necessairily imply than every story on /. is of high quality also.. but I think the average is :-)

            sorry for late commenting :)
    27.
            billy says:
            February 7, 2006 at 9:01 pm

            Interesting studies, and topic as well. I am wondering if you can provide the plot for the number of stories on /. (which I believe is for sure growing)? It seems to me the more stories, the denominator is bigger when you calculate “Daily average comments per story”.

            I’m not a big fan for RSS, never digg after a few try. but to me RSS and digg should bring in more appropriate audience thus comments to a /. story, if RSS/digg work the way it should. It’s like, the short header attracted someone to that particular /. story. The viewer should be at least interested in the story to do that extra step and they should be more likely to comment.

            in short, i guess it’s simply becasue there are more stories on /. or Maybe people got overloaded.
    28.
            veridicus says:
            February 21, 2006 at 5:36 pm

            The comments on /. still make it superior to any other similar web site. Many of the best slashdot comments are collected at http://seenonslash.com/ [seenonslash.com]
    29.
            epeaksoft says:
            November 15, 2006 at 10:54 am

            what did you use to create your graphs?

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Old School Dot Com (4, Interesting)

hhawk (26580) | more than 3 years ago | (#33470222)

While It might be old school dot com to start a business and "try to lose as much $$ as possible" it's clear that Google through YouTube has created something very valued, given the reach and impact YouTube has. What remains to be seen is through Google TV and other technologies can they bring this video from the desktop to the set top?

Also interesting will be to see if they can get as much corporate content as they already have consumer content. They did do away with Google Video service..

I would love it if YouTube/Google/Google TV was my one shop stop for searching on video content and then let the technology figure out how best to view it; also figure out the cheapest way. For example I subscribe to HBO on demand but on my cable box when I search for movies they will charge me for watching these movies unless I come in via the HBO interface.. I need a video search service that is looking to minimize my expenses not increase them.

Re:Old School Dot Com (2, Funny)

KimmoS (1448215) | more than 3 years ago | (#33470798)

Google through YouTube has created something very valued

You must be new to Dot Com 2.0?

According to Mayan astrology, the data-mining bubble will burst in 2012, resulting in expanded contentiousness regarding privacy issues. That will result in a collapse of the Web 2.0 and Social Media. The majority of all people has at this point lost all their IRL social skills and their ability to interpret exformation in regular IRL social situations == Zombie Apocalypse

Strangly this... (2, Funny)

Bobakitoo (1814374) | more than 3 years ago | (#33470238)

Strangly this coincide with the year of linux on the desktop. So it must be due to all the new linux desktop accessing youtube.

Re:Strangly this... (0)

Anonymous Coward | more than 3 years ago | (#33470796)

Not really. We still don't have decent flash, and not *all* youtube videos can be viewed in HMTL5.

Re:Strangly this... (0)

Anonymous Coward | more than 3 years ago | (#33472342)

Strangly this coincide with the year of linux on the desktop.

Are... are you threatening to strangle someone if it's not the year of the linux desktop? 'Cause that's a strategy I'd not thought of.

Impressed (1)

Beerdood (1451859) | more than 3 years ago | (#33470264)

Bravo youtube *claps* I would have though you would have been sued into oblivion by copyright lawyers shortly after you spawned (i.e. viacomm suit). Thanks for making work a lot less dull these last few years!

Re:Impressed (1)

pspahn (1175617) | more than 3 years ago | (#33470478)

...and your employer that much less profitable.

Re:Impressed (1)

Tubal-Cain (1289912) | more than 3 years ago | (#33470654)

Speaking of which, does the profitability that this announcement indicates include court expenses?

Re:Impressed (1)

Beerdood (1451859) | more than 3 years ago | (#33470726)

Good point - I would suspect they aren't, and that the lawyers are on the general payroll for google.

And Nothing of value was gained (0)

Anonymous Coward | more than 3 years ago | (#33470272)

Unless you're one of the many people who likes singing cats.

Almost there.... (2, Funny)

kenrblan (1388237) | more than 3 years ago | (#33470288)

Youtube is just a couple more Bed Intruders away from profitability.

Re:Almost there.... (1)

roman_mir (125474) | more than 3 years ago | (#33470418)

so did they catch the really really dumb homeboy?

Odd summary (4, Interesting)

proxima (165692) | more than 3 years ago | (#33470352)

The main point of the article is how Youtube is enabling a shift in how copyright holders deal with unauthorized content. They scan new videos for content matching that provided by content owners and split ad revenue with them. It's certainly less confrontational than DMCA takedown notices, but I imagine it's full of gray areas: what if the video I upload uses 15 seconds of a music video for commentary but is otherwise 9 minutes of my own contribution? Does Youtube still show more-than-usual ads and split the revenue with the artist?

Is there any way we can reliably well which videos have this revenue sharing? Some things are obvious - official music videos often have more ads and big "VEVO" logos everywhere. But how about these user-uploaded videos?

Re:Odd summary (1)

allusionist (983106) | more than 3 years ago | (#33470530)

When you upload the video, if it finds a content match it tells you and explains what that means for you. I did a music video for "Crazy" by Gnarls Barkley and it identified the audio track, told me that it identified the audio track, and placed a link to buy the song under the video. I assume had it been from an artist/label/etc who doesn't want any unauthorized use of their content, it would have blocked the audio (or entire video) and notified me in the same way that it had done so.

Re:Odd summary (1)

proxima (165692) | more than 3 years ago | (#33470890)

When you upload the video, if it finds a content match it tells you and explains what that means for you. I did a music video for "Crazy" by Gnarls Barkley and it identified the audio track, told me that it identified the audio track, and placed a link to buy the song under the video. I assume had it been from an artist/label/etc who doesn't want any unauthorized use of their content, it would have blocked the audio (or entire video) and notified me in the same way that it had done so.

Okay, so the uploading person knows, but what about the viewer? If nothing else, I'd be really curious to know which artists/labels/studios/etc like their content on Youtube and which still send takedown notices. It's certainly possible to figure it out on a case-by-case basis, but a little note on the video would make things easier.

Re:Odd summary (1)

pspahn (1175617) | more than 3 years ago | (#33470566)

I watch me some YouTube, but I was very unaware of this feature until recently.

I was drinking with some friends one night while my girlfriend was traveling in Norway. I happened to be karaoke night and her birthday was in a couple of days. Since I couldn't give her anything in person, I had the idea that I would sing one of her favorite songs (Talking Heads, This Must Be the Place) and YouTube it to her on her birthday.

I was astonished after uploading it that it told me I had uploaded content that contained copyrighted material. What fascinated me was that my singing was horrendous, I completely screwed up the second verse's timing, and there was a bunch of background noise, and yet it still knew that the song was copyrighted.

At first I thought it would get removed or something, but it's still there in all of its 2 view glory. She loved it. I enjoyed making it.

Better Odd Than Slashvertisement in My Book (4, Interesting)

eldavojohn (898314) | more than 3 years ago | (#33470746)

The main point of the article is how Youtube is enabling a shift in how copyright holders deal with unauthorized content.

Disclaimer: Summary author here. Honestly, wasn't too interested in that. YouTube's been auto-recognizing songs and videos through fingerprinting [slashdot.org] for quite sometime now and making an ad [slashdot.org] for the song pop up at the bottom of the video because you don't own it. I saw this with my friend's account as early as 2008.

Neat trick but not really fresh news to me. And you know, I read the article and the only thing that caught my eye was that YouTube might be turning a profit this year. I thought it was more newsworthy than your summary and -- frankly -- I get annoyed and feel like I failed whenever I post a summary and someone screams "slashvertisement" and gets modded +5 Insightful. That really does get to me. So instead of gaping in awe at how awesome they are at scanning your videos, I went with the profit angle. Especially since people have been so mixed on whether or not YouTube was a smart play by Google. Viacom trial lawyer fees aside, it's not a cheap outfit.

You'll just have to beat me to the scoop next time ;-) good luck!

2010 WILL BE The YEAR New Goverment Motors (-1, Offtopic)

Anonymous Coward | more than 3 years ago | (#33470426)

won't issue an I.P.O. because its finances are below G.A.A.P.

I hope this helps your porfolio performance.

Yours In Moscow,
Kilgore T.

YouTube losing money? (1)

wisnoskij (1206448) | more than 3 years ago | (#33470524)

Was the articles about YouTube not having to pay (any/much) money for bandwidth and therefor not actually costing google any/much money incorrect?

I thought that google losing over a million a day was proved to be false?

Re:YouTube losing money? (0)

Anonymous Coward | more than 3 years ago | (#33471098)

The $1.65 million loss figure was completely wrong. Securing bandwidth at the time (and perhaps even now) was at times like getting operator status in an IRC channel if the bandwidth wasn't being used anyway. Whoever did the analysis completely failed to locate the world\market rather than just the correct figures. /Yes, I'm AC. If someone with more courage wants to verify and\or elaborate, that's good.. and otherwise staying at 0 is fine with me.

Re:YouTube losing money? (0)

Anonymous Coward | more than 3 years ago | (#33471290)

It is true, Google recently built a cloud based video serving solution, amortizing the bandwidth costs over millions of nodes making it essentially free. They also feed some of the pipeline pressure into their storage systems, which accelerates software compression. Much the same way a car's turbo works, except that computers get faster every year, so it's more like a turbo that accelerates forever. They could sell the excess energy it creates back to the Grid, but net neutrality laws prevent them from doing so. Instead, they choose to reinvest it into more tubes.

Re:YouTube losing money? (0)

Anonymous Coward | more than 3 years ago | (#33474922)

Yep that's right, the $foo million a day "loss" was assuming Google was paying full retail to push those bits around -- which is absurd considering Google owns the largest fiber optics network in the US. This was debunked on sites like slashdot, in article comments, and so on, but of course the articles were never ammended.

          I definitely won't be surprised to see Youtube making money, the ads that actualy overlay the bottom of the video should certainly bring more money than some banner ad that is just as likely as not off-screen when the video plays.

Compared to Microsoft's Xbox (1)

GravityStar (1209738) | more than 3 years ago | (#33470888)

It's surprising how little flak youtube is catching in the comments to this story. I would have expected at least one sideways attack on youtube and its reason for existing.

Usually, in any Xbox story regarding its earnings, we would already have gotten a detailed graph & analysis on how it could never pay back the initial costs before the heat death of the universe.

Coincidence (1)

houghi (78078) | more than 3 years ago | (#33471008)

that it is the same year as the year of the Linux desktop?

Three or four years is fast. (1)

thePowerOfGrayskull (905905) | more than 3 years ago | (#33471018)

Regardless, when you pay $1.65 billion for a business, you probably don't expect it to take three to four years before you start making your money back."

Actually if you spend that much for a business, it would not be unreasonable to expect ten years or more. 1.65 billion is not an investment you make for a quick turnaround.

The same idiocy (5, Insightful)

DerekLyons (302214) | more than 3 years ago | (#33471526)

"Regardless, when you pay $1.65 billion for a business, you probably don't expect it to take three to four years before you start making your money back."
 
Once again, it's pretty obvious that the summary writer (like most slashdotters) knows roughly fuck all about business. Taking three to four years to start earning your money back is neither new, nor unique to Google, nor even notable.

Re:The same idiocy (0)

Anonymous Coward | more than 3 years ago | (#33474978)

A lot of people know fuck-all about business, including people that make the business decisions. Look at the spate of companies in the last 10 or 15 years that decided to eliminate R&D, basically with the view that they have products to sell now, and R&D won't pay back for years. Cut customer support to nothing, ignoring the fact that at least passable CS means happy customers that'll buy more from you down the road (that money won't come in until later!) It's stupid, but a lot of companies are run by people now where if something doesn't turn a profit this year they won't do it -- and they'll do things that hurt a company long-term if it makes a short-term profit.

defence (1)

DaveGod (703167) | more than 3 years ago | (#33471546)

Looks like it's just turning a profit for the current year. A milestone for sure, but a long way from the investment being profitable, though how you measure that is another question.

If they paid $1.65b 4 years ago and lost half a billion a year for 3 years (to ~October 2009) and broke even for this year then YouTube would have to be worth around $5.5b by the end of this month just to "break-even" (in real terms) if we were to say that cost of capital+inflation etc is 15%. I seriously doubt a 15% return would be even close to good enough for a dot com investment, but anyway.

This is probably a naive however. YouTube expanded the reach of the advertising business and more importantly they had to cover off the possibility for someone else to move in, take the momentum and market share. Just like they had to do with smartphones and are now wondering what the hell to do about Facebook. The new revenue opportunities are important, but defending their position far more so.

pop over ads (1)

Lord Ender (156273) | more than 3 years ago | (#33471610)

Dear advertisers: If you put ads on top of the content, I will not buy your product. If I click your shit, it's because I missed the X button. I will make a conscious effort to never send a cent your way.

Google: if you can't make a profit without running ads ON TOP OF your youtube videos, everyone will migrate to a site which can do so eventually.

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