In 2006, Google bought YouTube for $1.65 billion.
This was arguably one of the smartest business decisions in the tech history, as YouTube would continue to become one of the most popular websites on the Internet.
With its monetized ads and streaming services, it has successfully developed into a website which can be viewed for free and yet still generate huge revenue.
But, how much is YouTube worth today?
What You Will Learn
YouTube Company Net Worth
Even in its infancy, YouTube was one of the most popular websites to watch videos on, and from then until today its popularity has steadily risen to make it the king of streaming video websites.
But how does this manifest in worth?
This is dozens of time more than what it was worth in 2006 when Google bought it.
How Is YouTube Monetized
The way that YouTube achieves this and how it generates most of its revenue is through video ads.
Some considered that the price was too high for the zero-revenue website, and it was unclear how Google was going to make a profit on this.
They did so with the video ads, a lot of which are skippable and which are inserted in various parts of “monetized” videos.
This keeps the website and content creators generating revenue without its viewers having to pay for content.
The way that this works is that YouTube splits approximately half of the ad revenue with content creators and keeps the other half for themselves.
Even with the split mentioned above, YouTube’s revenue in 2015 was estimated to be $3.5 billion.
The secret behind YouTube’s growth is not only that the ads themselves generate great value, but also that the value they generate increases over time at a fast rate.
If its revenue was $3.5 billion in 2015, in 2016 it was estimated to be $5.9 billion, which is quite the jump.
This is not only driven by more ads being shown and ads which generate more value, but also by the growing popularity of the website itself. Every year, more and more users visit youtube.com and watch those ads, spurred on by the rapid growth of technology of which Google themselves are a big part.
Likewise, with the rise of smartphones and the decline of TV watching (at least non-connected TVs), more and more people are deciding to opt for online streaming video on their tablets and phones over watching a TV channel. This is especially true when it comes to the younger generation.
Basically, Google has done a very intelligent thing with monetizing videos on YouTube and then encouraging the entire tech to shift towards a landscape which makes watching online video more practical.
It is not only ads, however, which help YouTube grow, but also subscription services like YouTube Red and YouTube TV.
YouTube Red provides its services for $10 a month, which ironically made YouTube the top-grossing U.S. iPhone app in March 2018.
Furthermore, Google has plans to replace Google Play Music with YouTube Remix, a music service fully integrated with YouTube.
This just shows how much Google is investing in its video-sharing website.
In 2017, estimates said that if YouTube were a stock, it would be worth some $75 billion dollars at least.
This makes it five times the cost of Twitter, that has an estimated market value of $14.52 billion. The purchase of this website has truly paid off for Google. In fact, in recent years its popularity is becoming unrivaled.
When we look at the rankings of the most visited websites, we see that YouTube ranks higher than Reddit or even Facebook, just behind Google! For a website to gain this much growth has been rarely seen in the history of the Internet.
The website name being easily recognized by even those only marginally aware of technology and the Internet.
Studies show that a billion hours are spent every day watching YouTube when the whole world is taken into account.
That is a huge amount of traffic, surpassing Facebook video and even Netflix. All of those people that watch videos also watch ads and generate revenue for YouTube.
This is how the video-sharing giant keeps its value high and only increasing as time goes by.
The website’s popularity is only assisted by the amount of press it and its YouTubers are getting for the content they create.
This all contributed to a snowball effect and contributes to YouTube’s already massive worth and popularity.
In talking about the success of YouTube, one may mention how many dollars it is worth and just the ways in which those dollars are generated, and they would be quite right.
Google’s smart business practices and smart ad management helped skyrocket the financial worth of the website.
But YouTube is more than that. It did not reach its current worth and popularity simply through numbers and good business practices, although that has a lot to do with it.
It has done so with the help of the amazing content which creators put out and the amazing community which has been build up thanks to them and the audience.
YouTube is more than successful financially but that is largely because it has succeeded in bringing together people from all around the world, and it is precisely that interaction between creator and consumer, ad maker and ad viewer, which has made YouTube worth as much as it is today.