Study Internet video leader YouTube Inc.’s losses have been overblown by some analysts, but corporate parent Google Inc. doesn’t mind the misperception, according to a study released yesterday.
Technology consultants at RampRate Inc. project YouTube’s operating losses this year at $174.2 million — far below the $470.6 million estimated by Credit Suisse analysts in an April research report that became a hot topic on Wall Street and the Internet.
Google, which bought YouTube in 2006, has acknowledged YouTube isn’t profitable, but has refused to provide any specifics.
“Most people build outside views of what it costs us to do things, and often they exaggerate,” Google’s chief financial officer, Patrick Pichette, told Maclean’s.
RampRate reasons the perception of large losses at YouTube helps Google negotiate more favourable contracts with movie, TV and music studios licensing their video. What’s more, copyright owners also are less likely to go to court in pursuit of unpaid royalties and damages if they believe YouTube is a big money loser, according to RampRate’s thesis.
