Cats and how-to video are worth big bucks these days. YouTube is expected to generate about $5.6 billion in gross advertising revenue worldwide in 2013, according to research firm eMarketer. The lift in advertising dollars comes as consumers reach for their mobile devices and move away from the TV screen.
Google (Nasdaq: GOOG), which owns YouTube, doesn't break out its financials from the video streaming site but eMarketer's assumptions top previous projections from other research reports, including Jeffries & Co.'s $4.5 billion and Barclay Capital's $3.6 billion. eMarketer estimates YouTube will net almost $2 billion in ad revenue, up 66 percent from last year's totals after paying content and ad partners. About 79 percent of YouTube's U.S. ad revenue – about $850 million -- comes from video advertising. That translates into a 20.5 percent share of the overall $4.15 billion U.S. video ad market. In 2014, eMarketer estimates YouTube video-ad revenue will hit $1.22 billion, taking a 21.1 percent share.
Google bought YouTube in 2006 for $1.65 billion. The service has more than 1 billion viewers per month, according to the company. According to The Wall Street Journal, if eMarketer is correct, YouTube would be about nine times the size of Twitter when it comes to revenue. Analysts expect Twitter will post revenue of $640 million this year. Twitter is valued at $29 billion, suggesting that YouTube significantly boosts Google's value.
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