Yesterday it became clear that more than 5.6 billion dollars will be spent by some advertisers on YouTube in 2013. Companiess advertisement expenditures are expected to exceed the amount spent in 2012 by more than 50%. This considerable rise is due to the fact that most advertisers are constantly trying to reach more and more young consumers, who are online. However, not all the advertising revenue will be kept by YouTube, because the website is distributing part of its income to its partners and content creators.
Google acquired YouTube in 2006 for the sum of 1.65 billion dollars. Now the website boasts for having more than 1 billion viewers monthly and attracting nearly 20% of the advertising spending on online video in the U.S. This makes YouTube highly competitive and allows it to keep its leading position on the market.
Media research firm eMarketer, one of the most popular media research companies, made a report, forecasting that the net revenues of YouTube will amount to 1.96 billion dollars once the company pays its partners. This makes the revenue of the company 1.7% of the global digital advertising spending, and a larger market share than the ones of some of the largest social and media networks, such as Twitter, AOL and Pandora.
“Video ad revenues are expected to increase significantly in coming years for YouTubes US operations, particularly as mobile video viewership grows,” eMarketers said in their report.
The interest of most advertisers towards YouTube is greatly beneficial. It comes as a new type of online video production, which is oriented towards the younger generation online. For example, Maker Studios, which is one of the most successful online video networks, has recently expanded its shareholder list with some new investors such as Time Warner, Elisabeth Murdoch and Robert Downey Jr. The new trend also seems to become quite popular among Hollywood studios and television networks, which are striving towards some new and beneficial acquisitions.
In the same time, YouTube Space LA – a 41,000-square-feet production space has been invested in by Google Inc.
According to CNN Money, the current share price of Google Inc. is 0.68% down and its one-year return rate is 52.29% up. The 40 analysts offering 12-month price forecasts for Google Inc. have a median target of $1.100, with a high estimate of $1.300 and a low estimate of $850.00. The median estimate represents a +2.11% increase from the last price of 1,077.29.