YouTube finally turning corner in online video advertising potential

Google talks up YouTube as a video platform that will continue to grow and revolutionize as online video advertising matures.
Written by Sam Diaz, Inactive

After five years on the Internet, is YouTube finally ready to turn a monetization corner for Google?

Google execs are usually pretty hushed about YouTube - but CFO Patrick Pichette and global sales president Nikesh Arora seemed especially talkative during a conference call with analysts yesterday. Google execs spent a lot of time on YouTube following the search giant's second quarter earnings.  In his opening remarks about the company's second quarter performance, CFO Patrick Pachette called YouTube's growth "impressive" and said brand advertisers consider it a must-buy.

YouTube has come a long way from just being a host for wacky homemade videos. It has become a video platform, a globally recognized one that's finally starting to mature into something that could help Google shape the video advertising industry the way it has with others industries. Today, YouTube sees about 2 billion page views per day and more than 1 billion monetization videos per week. On the call, Pichette said:

It is a huge kind of first page. And it is aggregating audiences, and you see it today through the top brand advertisers showing up for it. So on the World Cup you saw the Sonys and the Cokes -- this is the power of YouTube today. It is like a worldwide audience.

Just as YouTube became the de facto testing ground for the Internet's user-generated video crowd, it's also becoming the testing ground for online video ads. Online video advertising is in its earliest stages but there seems to be no doubt that it will be a core driver of revenue growth as new doors open.

Already, the company is monetizing YouTube in different ways - through the homepage, through watchpages and through promotion videos. And, of course, the company is looking at new ways to place ads in the content, to make them more interactive using the computing platform in a way that television commercials are not. Likewise, the company is looking at new ways to personalize advertising, meaning that a teenager might see one ad while a grandparent sees another.

No one is talking dollars and cents yet but if you look at what Google wants to do with YouTube and advertising as a testing ground, it almost starts to make sense why Google would launch Google TV, which it announced at its developer's conference earlier this year. Start thinking about interactive video advertising and where people might see and interact with them. Sure, the computer is still the connection to the Internet today. But there's plenty of excitement building around Google TV, as well.

You'd never know it from the Google call yesterday. But earlier this week, during Intel's earnings call with analysts, CEO Paul Otellini was bullish on the new Google TV products as a driver of sales of its atom chip  and hinted that they - and other embedded consumer electronics - could be the driving force of the future, He said:

Intel CEO Paul Otellini talked up Google TV and the potential effect on sales of its Atom chip on the company’s earnings conference call. Otellini said:

The new growth in Atom this year is going to be in embedded and in products like the Google TV product that were launched last month. We didn’t talk about that in the last conference call because it wasn’t announced yet, but I can tell you that a number of companies are now moving towards production on Atom based television, set-top boxes, DVD players and so forth around that particular construct. And to me that is one of the bigger things to watch for the holiday season as those products break market and see what happens.

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