Is Google going to stop subsidizing Youtube?

Posted on October 18, 2009
Filed Under Video Sharing | Leave a Comment

is the pioneer of . is the leader in the video sharing niche with a share exceeding 80%. is important to in their effort to dominate the web. is EXPENSIVE!

Youtube costs Google in the hundreds of millions per year. That’s US dollars.  While Mark Cuban claims that Google has to stop subsidizing Youtube, because Youtube will be eventually superceded by a better competitor as does every technology service eventually, I believe Google will not do that. And the reason why Google won’t let youtube close is- THEY CAN’T AFFORD THAT!

Some of the reasons why Google can’t afford to lose Youtube:

  1. Video is a medium already widely available on the web(even excluding youtube). Losing Youtube would impair google presence in such a way that they will be directly on par with Microsoft(powering Yahoo shortly).
  2. Google has failed once already in the web video niche. Second failure is a very bad thing for a technology leader.
  3. Admitting failure is not an option for their management on something that costly (stocks will go deep down)

In short by losing Youtube Google will feel mortality again and that’s not an option!

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