20 July 2009 | Author: L. Sutherland Head of Media Content

Revised ad policy helps YouTube boost profits

YouTube is currently the undisputed leader when it comes to on-demand video online. However, being at the front of your field doesn't necessarily mean that your site is turning a profit, as YouTube well knows. The video sharing site's losses over the last year are estimated at anywhere between $174 million to $470 million.

It's no surprise that owner Google has been keen to find a way to monetise the popular service and it looks as though the Mountain View giant has finally found a way to successfully turn a profit. According to Brand Republic, Google posted results on Friday that saw a surprising increase of 18 per cent on post-tax profits.

The boost is the result of a change in policy that saw YouTube allowing pre-rolls - adverts that play before a video begins - on the site following research that revealed users didn't find them off-putting. Instead, YouTube uncovered how more people appear willing to watch adverts as more and more content moves to the web.

Google chief executive Eric Schmidt said that the increase in revenue was a positive surprise but did not comment on when YouTube would turn a profit. However, Brand Republic reports that Google's chief financial officer, Patrick Pichette said that the time could come "In the not too long-distance future".

Good news for the video sharing site, especially in light of the recent potential challenges to its top spot in the form of a partnership between Channel 4 and Facebook.

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