Google/Youtube problems

Mon Nov 19 13:27:53 UTC 2012

On Nov 19, 2012, at 03:05 , Saku Ytti <saku at ytti.fi> wrote:
> On (2012-11-18 23:47 +0100), Daniel Suchy wrote:
> 
>> Is anyone else seeing similar problems with Google/Youtube?
> 
> My advice is, host the content locally.

Sound advice, IMHO.

> I'm bit curious about market position youtube has. GOOG claims youtube is
> making profit, but I think this is because network is considered other BUs
> cost and youtube rides on it for free (remember pre-youtube, how GOOG
> micro-optimized google front-page to save on network cost, post-youtube
> they rightly stopped caring and added predictive input etc.)

I do not work for Google, nor have I asked anyone in Google how they do their accounting.  However, I would be rather surprised to find the vast majority of their capacity is charged to the BU using a tiny fraction of that capacity, while the BU using the lion's share gets a "free ride".

> I can't see how anyone could compete against youtube, I don't believe the
> service is anywhere near profitable (it's maybe 10% of Internet, and I
> can't see revenue being 10% of Internet), if it would have to pay for the
> network itself. Consequently you probably can't compete with them, as you
> need to cover the costs from the profits. It is just so ubiquitous service,
> that if it does not work your eyeballs will switch to network where it
> does, so you will give google free capacity, which you wouldn't probably do
> for others web streaming shops.

First, I believe YouTube is > 10% of the Internet.

Second, I see no reason why that requires anything close - not even within a couple orders of magnitude - of 10% of the Internet's revenue to be profitable.  Why would you assume such a thing?

-- 
TTFN,
patrick