Youtube doesn’t have a large competitor challenging it for market share like other major companies do. There are plenty of streaming services, but YouTube is the only game in town when it comes to people generally browsing video content and following their favorite creators.
Coca-Cola has Pepsi. McDonald’s has Burger King. Toyota has Honda. Why doesn’t YouTube have one?
In: Economics
YouTube as a business division was a loss leader for many, many years. This means that despite being acquired by Google in 2006 for $1.6Bn, YouTube was a drain on the company’s bottom line for many years. Only in the past 4 years has YouTube seen significant revenue growth on its own. It only survived because Google has deep pocket books from which to fund it and Google took a long term view of integrating YouTube into its ecosystem.
When integrated with the rest of Google’s product portfolio, YouTube is incredibly synergetic. The operating losses from YouTube were offset by tight integration with Google’s advertising and search business divisions. YouTube also gets to take advantage of Google’s enormous infrastructure.
YouTube had competitors during the 2000s and 2010s, but most of these have since gone defunct.
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