Google's Tim Armstrong on YouTube; IE 8 and Microsoft Cashback

Google's Tim Armstrong talked up YouTube's profit potential and dished a bit on Microsoft's cashback program to gin up search market share. Armstrong also declined to chat about IE 8 and the possibility that Google launched the Chrome browser to combat its privacy feature.

Armstrong, speaking at the Citigroup Technology Conference in New York, had a fireside chat with Mark Mahaney. Much of Armstrong's comments were mentioned before, but here are a few highlights.

YouTube can scale and be profitable. Armstrong and Google execs have been singing the YouTube profit song for many quarters. This go-round Armstrong said YouTube is a main topic among ad agencies and that advertisers "want three things: Better brand, more traffic, more revenue. YouTube has the ability to do all three." Armstrong acknowledged that YouTube and social networking sites have content that advertisers don't want to associate with, but that situation will change over time. Armstrong added that Google is in a better position to take orders for YouTube today than it was a year ago. Within five years, "we're in a position to scale that business."

Microsoft Cashback: Armstrong said ad deals are not "always about the money." "It's the worst thing to make a lot of money but have a bad end-user experience," said Armstrong, who noted not all deals can drive traffic needs and profit. That's a subtle way of saying Microsoft can't buy its way out of its search market share pickle. IE 8 and the launch of Chrome. Mahaney asked Armstrong about the theory that IE 8's privacy feature could hurt DoubleClick, which relies on cookies, little files that track you. Armstrong noted that the Internet Advertising Bureau had "been in conversations with Microsoft over the browser, but it will be interesting to see what the industry outcomes are." Armstrong declined to comment more on IE 8. It also should be noted that Chrome has its own privacy feature. Of course, Google controls its own browser and isn't likely to thump DoubleClick's cookies.

Monetizing social networks. Armstrong noted that Google has tried to tailor AdSense targeting to focus on social networking sites. Monetizing social networking sites became a hot issue earlier this year. It sounds like that social network targeting is a work in progress.