I remember thinking Google paid an absurd and ridiculous sum of money when they acquired YouTube. I couldn’t have been more wrong, what an incredible acquisition.
Just like with FB’s purchase of Instagram. I remember people making fun of Zuckerberg for paying $1B for a “filter app than can be made in few hours”.
I think the magic wasn’t in those apps or websites but the traction they got and how that was preserved. Both FB and Google were very careful to preserve the origins when evolving.
I remember Google videos, it was very bad. If this wasn’t Google but Microsoft, they may have tried to integrate Youtube into their Video platform and destroy everything.
Yeah, he was buying market share. Google was buying advertising potential and market share. The largest video streaming platform on the planet, still not a silly buy.
At the time YouTube was acquired their infrastructure costs were quite high. Not as crazy as today's AI companies, but in the same way a lot of people were questioning if they could ever make money because of it.
Ah I see, I think I was still in my teens when that purchase happened, so I had no idea about the concerns or anything. I just was shocked at the amount of money because it's a lot of money.
The Youtube acquisition and growth strategy was interesting (I left another comment about this). IG was also quite interesting.
Many here will be familiar with how the founders of these tech companies basically keep control over their companies while holding minority stakes through different classes of shares. Zuckerberg was the only one to hold these shares I believe and could basically authorize the IG purchase by himself. And that's what he did. He told the board after the fact. At least that's the story I read.
IG was growing fast but it blossomed under FB's stewardship in a way that I'm not sure it would've had it stayed independent or someone else had bought it. For many years, IG was allowed to operate semi-autonomously within FB (kinda similar to Youtube under Google actually). They continue to have their own tech stack, which has caused its fair share of problems, and essentially operated seprately from a product perspective.
But scaling requires a whole bunch of infrastructure that isn't all technical. Things like site safety, taking down problematic content, creating an ads ecosystem and so on. FB had a lot of expertise and existing infrastructure for all of this because of, well, Facebook. And whatever fauts FB has, this is something they did very well.
I totally think Google would've screwed it up, for example.
I guess my point is that they didn't exactly buy a $100B+ business for $1B. They turned it into a $100B+ business. Just like Youtube.
That being said, I think IG has actually faltered from a product perspective over the last 5+ years. Reels (like Youtube Shorts) are a kneejerk reaction to Tiktok, who is eating both of them alive in short-form video. And Tiktok's recommendation algorithms are a step above of anything I've seen on FB, IG or Youtube.
I was never a big IG user but from what I hear from people who are or were and what I read online, it feels like IG has kinda lost its way and nobody really knows what it's for anymore. It's certainly not for sharing among your friends (which is how FB started too). Photo-sharing seems to be falling away to video. So who exactly is it for?
> Tiktok's recommendation algorithms are a step above of anything I've seen on FB, IG or Youtube.
That's because their main UI isn't anything like Tik Tok. You start out with a normal feed on IG, on YouTube you might see recommended videos, but its not BAM HERES SHORT FORM. Tik Tok was by design this UI and recommendation scheme. I think its a UX issue not an algorithm issue necessarily. If I open YouTube shorts I get a lot of the content I keep going back on YouTube to watch, on IG probably not since I dont use FB or IG much if at all. If these UIs were more prominent, I could see them matching or competing with Tik Tok on these fronts.
What's funny to me is Tik Tok users quitting Tik Tok because they think the US has poisoned it, and then running to YouTube or reddit. Look on r/tiktok sometime, I have been checking on it anytime Tik Tok has 'drama' and it never disappoints.
I agree that the UX on Tiktok is cleaner and, like you say, in part part that's due to it being only short-form. It's worth noting that "short form" here means up to ~10 minutes long at this point, includes live videos and also includes photo galleries.
But it's more than that.
When I started using Tiktok, Charli D'Amelio was the biggest creator I believe and not once did I ever see one of her videos. I'm just not in that demographic. I've had repeated experiences on Tiktok where I'd see a new creator and see they have like 17M followers and I'd think "how have I never heard of them before?"
The way I describe this is that Tiktok's content is effectively segmented and isn't "global". By "global" I mean if someone is a top creator on IG or FB or Twitter, you'll see them. The platform will push them out to you and Tiktok is just more sophisticated than that.
The second big difference is the responsiveness. It takes other platforms longer to learn. Maybe they've gotten better now but, from what I know, historically other platforms had daily jobs that updated user recommendation preferences based on your activity. So if I started watching a lot of gaming videos, this wouldn't be reflected in my feed until the next day. Tiktok I think was the first to have a truly real-time updating feed.
Now this isn't a straight real-time vs overnight situation. It is/was more hybrid than that. So in FB's case, recommendations were more real-time but updating your preferences wasn't.
Insta was tapping out of how much content (and therefore ads) they could show a user. They could either find new content to show or add more ads per unit of content. There are only so many friends, who only take so many photos. Social media stopped being “social” because it just wasn’t as good of a business as generic media. There are endless influencers and videos is way more engaging. Influencer content is semi-professional content and is way better made and way more engaging than your family who posts only at big events. Meta is very data driven, and they understand exactly how reels is increasing duration of app sessions - which means more ads.
YouTube is close to losing that preservation. It's so slow and clunky to load in the desktop browser that I'm finding myself using it a lot less. It's absurd how heavy it is now.
UX is getting worse too, e.g. the save to list dialog closing after adding to a single list instead of allowing multiple to be selected. It wouldn't be so bad if it didn't take forever to open.
A few things I can’t stand about Youtube’s desktop website:
1) Spacebar sometimes skips to the next video when playing a playlist. Just why?
2) You never know if the small buttons like play next on the thumbnails will work or just play that video right away.
2) when on the homepage, you open a few videos in new tabs and close the homepage only to find out that you just open bunch of “this video contains paid promotion” disclaimer pages. Re-open the homepage to actually open the videos and they are all gone, the page shows a grid of different videos.
so yes, I agree that the web interface went downhill.
glad it’s not just me. we used to have multi-playlist saves with a modal that showed more than three pixels of your library. now it’s slow, cramped, and forces you to hit SAVE over and over even though the backend supports it. feels like a regression dressed up as bad UX.
I am using it less because I can't find any videos as the search is completely broken (no, I won't enable history tracking). Many days when I am in the mood to watch videos, I just give up. It doesn't help now that most searches return AI-generated video (that has millions of views). Who watches these things?
For a lot of the early years, it lost a lot of money. Providing the bandwidth, getting distribution closer to the ISPs etc was a major investment. Lots of dark fiber.
A bit like Google Maps though, a great visionary early investment that they then poured a lot of $ into to make them what they are today. No one else was just providing free satellite imagery for the entire world back then, not even Google Maps.
The investments to support these two products at least, have been really important in helping Google maintain its hold in other places too.
Lots of people still whinge about youtube, but standing up a solid competitor would take too many $ for anyone but other big tech now.
Which certainly raises the question: are they in fact making money overall on youtube? Considering not just the initial acquisition cost, but also the further investment they put in over the years. I'm not sure how one would find out, but it isn't the slam dunk obvious case that the OP was implying.
> are they in fact making money overall on youtube?
if they weren't, won't it make sense to drop it? So by empirical observation of the outcome, it seems like youtube produces enough value to google that it is worth the investment!
Now if you ask whether youtube is financially net-positive; ala, if youtube were to be spun off as an individual/separate entity without being owned by google, then that's another question altogether. I have doubts it is financially net-positive without the leverage that google provides in utilizing youtube's assets.
Post-acquisition, Google employees made a number of smart moves with good execution, including a viable comp model for the creators and music rights deals. Several moves I consider bad as well, but the good moves outweigh them.
Looking back, I’m still pretty amazed they got so much of it right. Which is to say, a good chunk of the value wasn’t in the value of YouTube itself but in what Google brought to the table _or_ a synergy between the two.
I’m not sure how true it is but I remember reading the story where Google saw YouTube as the better choice because those guys are down the road, against their other competitors that they were trying to buy.
Not sure if WhatsApp paid off, though. There are reports of up to $1 billion in annual revenue with the Business API, so this is far less than what they paid. I think Meta's strategy was to create a Western version of WeChat, which has a very high ARPU, but for some reason, they never invested in it properly... They added Stories, a "Venmo" feature, and then gave up.
I think that's an example of the opposite, the number was huge but how much revenue is being driven by WhatsApp? I think that would be a hard one to put a number on. I'm sure it's important for Meta overall, but it's not directly driving ad or subscription revenue.
That's the weird thing about WhatsApp though.. back when they bought WhatsApp it was still a paid service and a lot of people actually paid for it and it was on its way to get to a billion active users.
After that acquisition, they made it free for all and started chasing the $$$ with WhatsApp for business. And ads. No idea which is more profitable anymore. I think they'd still be able to monetize it more with WhatsApp payments and those ads in status updates. I'd definitely like to know what the numbers are looking like these days..
> it was still a paid service and a lot of people actually paid for it
It was, but it was very cheap (UK pricing was £1 a year), and I believe had lots of free users anyway. My guess is that the revenue wasn't worth pursuing.
Whatsapp claims to be E2E encryption, but it can still submit anonymous("") metadata("") At least they can identify you and your contacts by real phone number, real name and nicknames, and more often than not real pictures; the information can be crosschecked across all your contacts who in good faith provide good information.
There are also bussiness accounts which are really important depending on the location.
It is very hard to put a price to that, but its value is undisputable.
This is exactly my point. I'm sure there's lots of intelligence that Meta can attribute value to, in a complex attribution process, but I doubt that it's as simple as a revenue stream or P&L.
> the number was huge but how much revenue is being driven by WhatsApp?
Meta isn't a charity. If they aren't making money off WhatsApp outright, the users are the value and they're making money off them some other way, encryption be damned.
Meta gets to spy on the communication habits and networks of half of the planet through Whatsapp. Since Meta is essentially a mass surveillance company, the acquisition makes a lot of sense.
The story of this is actually pretty interesting. Everyone had been tryign to do video-on-demand and failing, basically. Including Google. Google had a product called Google Video that failed pretty spectacularly.
Youtube came along and was basically spending money like there was no tomorrow. Well, for the time. It's nothing compared to the current crop of AI companies. So with Youtube, everybody was terrified of the bandwidth costs, with good reason. The cost to build a sufficient network was exorbitant using off-the-shelf hardware.
Google runs their own networking hardware and servers at the efficiency level at the time that was unprecedented. They measure things in a unit called PUE (power unit effectiveness). That's basically how many Watts each Watt of computing power cost. Things like cooling would eat that up. Typical data centers at the time were at like 1.5-2. Google's own data centers were more like 1.1. Google was actually lying and saying it was 1.2 and people didn't believe it was that low. The best Google data centers are I believe more like 1.05-1.08 now. Passing cooling and that sort of thing contributes to this.
So Google of anyone had the cost controls on computing power and and networking like nobody else. And Youtube was burning VC cash. That's why they got it so "cheap".
This still created huge problems for Google and as Youtube continued to grow it was heavily impacting national ISPs, peering connections and the like. When Youtube was acquired they came up with a bandaid solution (called Bandaid) where they bought commercial server racks from Dell and elsewhere and loaded their own software on them. They would give them to big ISPs. The software would locally cache the most popular Youtube videos to cut on the ISP's bandwidth costs and the latency. I believe that this temporary solution became permanent and continues to this day.
Nobody could monetize Youtube like Google either as in nobody else has a remotely comparable ad infrastructure and ecosystem.
And lastly, nobody could encode video like Google could. Nobody else had access to that much computing power and could use it as efficiently. That was a huge deal because the encoding requirements are massive.
So yes, it was an amazing acquisition but I think if anyone else at the time bought it, they would've failed.
lol yeah at first I was annoyed that they seem to be applying pressure on people without the history feature cause they certainly kept recommending videos to me even though I had that feature off. But a few weeks ago, the screens are all blank imploring me to turn on the history, but I actually quite like it. No more youtube doom scrolling on my phone.
> He said YouTube Premium - its service letting users pay to remove ads between videos, or songs on its music service - had helped boost paid subscriptions across Google consumer services to more than 325 million in 2025 overall.
Out of the 60bn they made only 325 ml from paid subscribers. The title made it like it was an important figure. There's also no YOY numbers or profit so it's difficult to draw a conclusion.
And still no information about how much of the subscription revenue is shared with the content creators. Feels like YouTube is dumping all the money to shorts and other creative accounting, and giving nothing to the creators.
Recently a significant percentage of the folks I follow stopped making videos.
> The figure, which totals the money generated through advertising on YouTube as well as paid subscriptions, far surpasses streaming rival Netflix's $45bn revenue.
I wonder if this is a fair comparison, though. It strikes me that Netflix’ revenue model is simpler and their costs are also lower, but I guess we won’t know YouTube’s costs any time soon.
only if that video generated sufficient revenue to pay out - which is quite a high bar. But the long tail of content is what draws people onto youtube as a platform - so youtube derive a benefit from this long tail content that they do not pay for.
However, the long tail for netflix won't have this advantage at all (because even niche shows with low audience will cost money to produce).
Not to mention that netflix has to pay upfront for their content. Where as youtube only pays _after_ the content has had ads displayed that generated revenue.
> He said YouTube Premium - its service letting users pay to remove ads between videos, or songs on its music service - had helped boost paid subscriptions across Google consumer services to more than 325 million in 2025 overall.
325 million people that don't know about Firefox and uBlock Origin?
I pay for YouTube premium and it’s one of my happiest expenditures. YouTube is a miraculous, unbelievable treasure trove. Learn any language, any musical instrument, any academic subject. TV clips from the 80s that someone taped in VHS for some reason. Isaac Arthur, Veritaseum, numberphile. I’ve gotten more value from YouTube than any other single site on the internet, and it’s not close!
I want to use it on my Apple TV and don’t want to fiddle around with VPNs. It’s the only streaming service I pay for and I’m happily doing it. It also pays creators I’m watching which is a nice feel-good benefit.
It is very amusing to read HN comments that complain about the "enshittification" of free platforms while simultaneously mocking those who would pay for stuff they like. YT is dollar for dollar the best digital subscription I pay for and I pay it gladly.
I don't think one should mock people who are paying for youtube. If they find it's good, then it's laudable to pay for it. But that said, I personally can't relate to that position. There just isn't any content on youtube that I find interesting enough that I would pay for it. It's a time waster for me, not something I seek out because it's a compelling way to spend my time.
Youtube has reached the terminal stage of enshittification:
• the good stuff is VHS-quality TV content that somebody pirated
• the ads, once nonexistent, are typically disreputable and now incessant
• the few 'creators' worth watching are lost in an ocean of audience-captured, brain-dead garbage "hey guys... [product placement disguised as organic content]... misinformation... remember to like and subscribe... [product placement disguised as organic content]"
• access becomes increasingly arcane due to ad-blocking measures
• one of the lowest quality comments sections - largely inorganic, rogue state-sponsored - on the internet
• increasingly just AI slop
The day I can't scrape videos via yt-dlp is last day I permit youtube domains on my network. Personally, I would prefer to eat a rotten cat carcass than pay a single cent to Youtube.
In a better world, youtube would be some kind of a protocol, not a mediocre company serving as a middleman.
i am a subscriber as firefox + ublock origin does not work on phone (on android, i think? last time i checked) and neither on smart tvs (mine is rokutv)
NewPipe and IronFox (hardened Firefox) for Android, although I suspect these need to be "sideloaded" as Google won't allow them on the Play Store. (I run Graphene so this does not apply to me.)
For the TV, I would suggest VacuumTube (a frontend to the Leanback interface) on a free/libre box running Linux.
Firefox and ublock origin won't help you play music in the background on your iphone while using another app......tons of other situations like that. Think a bit more instead of wasting peoples time with pointless and braindead comments please. I say this as an android/linux user.
YouTube is replacing my Netflix now, honestly. But I am not happy it being just an algo game, so I am building tubeandchill.com to find good creators, get video tips by newsletter, and more... (tell me what you want to see there, please).
Oct 30, 2024~ YouTube, the video platform Google acquired for $1.65 billion in 2006, has generated $50 billion in combined advertising and subscription revenue.
I don't think I ever look at my feed on Youtube and I'm honestly not even sure why. This might just be a byproduct of when I started using it. I don't think I even logged in for the longest time. Even today, I don't subscribe much or even like videos.
My usage of Youtube seems to be near 100% intentional, meaning I'm looking for something in particular. I just don't really use Youtube for discovery. I'm sure other people differ. But I really wonder how much of this comes down to the UI and/or algorithm just not being that good.
the closest I get really is looking at my home page sometimes and seeing what channels I've previously watched have new videos, basically.
Now compare this to Tiktok. My usage of Tiktok is 99% on my fyp. There's a follwoing tab but I basically never use it. Almost everyone I follow I've found on my fyp. It's so good too. A big part is how quickly it learns. Watch one video on a topoic and you'll quickly be prompted with others in that category.
But how much of this is just the usage patterns I have chosen with Tiktok that I didn't for Youtube for largely historical reasons? I honestly don't know.
I don't watch baby content. Somebody at home does, so youtube offers me that. No, we don't share accounts. No, we don't share devices. Sometimes youtube offers me Chinese and Indian content, and ads.
It adds some amount of "proxy content". But right-click or long-click and block the channel on the stuff you really don't want. Also if you watch a video you thought was interesting but it was lame, go to history and remove it.
And finally if you regularly watch stuff subscribe, it's a strong preference indicator.
I do get some junk in my feed now and then, but mostly I discover good stuff I enjoy. And that includes really small channels.
As to why would someone pay for youtube when you can block ads etc. I have been paying for probably close to 10yrs it not more.
Well, first you can use youtube on your phone, tablets etc, without seeing ads ever, I didn't realize youtube has ads.
Initially, my kids would ask for toys and fast food that I knew they didn't know anything about. So I realized family subscription is way cheaper then me buying even a single $25 toy, and most of them were more expensive.
Over the years, my kids have grown healthier both in mind and body thanks in part of that subscription.
I remember thinking Google paid an absurd and ridiculous sum of money when they acquired YouTube. I couldn’t have been more wrong, what an incredible acquisition.
Just like with FB’s purchase of Instagram. I remember people making fun of Zuckerberg for paying $1B for a “filter app than can be made in few hours”.
I think the magic wasn’t in those apps or websites but the traction they got and how that was preserved. Both FB and Google were very careful to preserve the origins when evolving.
I remember Google videos, it was very bad. If this wasn’t Google but Microsoft, they may have tried to integrate Youtube into their Video platform and destroy everything.
Being good custodian is just as important.
Yeah, he was buying market share. Google was buying advertising potential and market share. The largest video streaming platform on the planet, still not a silly buy.
At the time YouTube was acquired their infrastructure costs were quite high. Not as crazy as today's AI companies, but in the same way a lot of people were questioning if they could ever make money because of it.
Ah I see, I think I was still in my teens when that purchase happened, so I had no idea about the concerns or anything. I just was shocked at the amount of money because it's a lot of money.
the first version of YT were based on Flash/MM, IIRC
Zuck clearly saw some detaillied KPI before signing on the napkin: Acceleration & growth numbers.
It also turns out that $1B is like... pennies to those people now
The Youtube acquisition and growth strategy was interesting (I left another comment about this). IG was also quite interesting.
Many here will be familiar with how the founders of these tech companies basically keep control over their companies while holding minority stakes through different classes of shares. Zuckerberg was the only one to hold these shares I believe and could basically authorize the IG purchase by himself. And that's what he did. He told the board after the fact. At least that's the story I read.
IG was growing fast but it blossomed under FB's stewardship in a way that I'm not sure it would've had it stayed independent or someone else had bought it. For many years, IG was allowed to operate semi-autonomously within FB (kinda similar to Youtube under Google actually). They continue to have their own tech stack, which has caused its fair share of problems, and essentially operated seprately from a product perspective.
But scaling requires a whole bunch of infrastructure that isn't all technical. Things like site safety, taking down problematic content, creating an ads ecosystem and so on. FB had a lot of expertise and existing infrastructure for all of this because of, well, Facebook. And whatever fauts FB has, this is something they did very well.
I totally think Google would've screwed it up, for example.
I guess my point is that they didn't exactly buy a $100B+ business for $1B. They turned it into a $100B+ business. Just like Youtube.
That being said, I think IG has actually faltered from a product perspective over the last 5+ years. Reels (like Youtube Shorts) are a kneejerk reaction to Tiktok, who is eating both of them alive in short-form video. And Tiktok's recommendation algorithms are a step above of anything I've seen on FB, IG or Youtube.
I was never a big IG user but from what I hear from people who are or were and what I read online, it feels like IG has kinda lost its way and nobody really knows what it's for anymore. It's certainly not for sharing among your friends (which is how FB started too). Photo-sharing seems to be falling away to video. So who exactly is it for?
> Tiktok's recommendation algorithms are a step above of anything I've seen on FB, IG or Youtube.
That's because their main UI isn't anything like Tik Tok. You start out with a normal feed on IG, on YouTube you might see recommended videos, but its not BAM HERES SHORT FORM. Tik Tok was by design this UI and recommendation scheme. I think its a UX issue not an algorithm issue necessarily. If I open YouTube shorts I get a lot of the content I keep going back on YouTube to watch, on IG probably not since I dont use FB or IG much if at all. If these UIs were more prominent, I could see them matching or competing with Tik Tok on these fronts.
What's funny to me is Tik Tok users quitting Tik Tok because they think the US has poisoned it, and then running to YouTube or reddit. Look on r/tiktok sometime, I have been checking on it anytime Tik Tok has 'drama' and it never disappoints.
I agree that the UX on Tiktok is cleaner and, like you say, in part part that's due to it being only short-form. It's worth noting that "short form" here means up to ~10 minutes long at this point, includes live videos and also includes photo galleries.
But it's more than that.
When I started using Tiktok, Charli D'Amelio was the biggest creator I believe and not once did I ever see one of her videos. I'm just not in that demographic. I've had repeated experiences on Tiktok where I'd see a new creator and see they have like 17M followers and I'd think "how have I never heard of them before?"
The way I describe this is that Tiktok's content is effectively segmented and isn't "global". By "global" I mean if someone is a top creator on IG or FB or Twitter, you'll see them. The platform will push them out to you and Tiktok is just more sophisticated than that.
The second big difference is the responsiveness. It takes other platforms longer to learn. Maybe they've gotten better now but, from what I know, historically other platforms had daily jobs that updated user recommendation preferences based on your activity. So if I started watching a lot of gaming videos, this wouldn't be reflected in my feed until the next day. Tiktok I think was the first to have a truly real-time updating feed.
Now this isn't a straight real-time vs overnight situation. It is/was more hybrid than that. So in FB's case, recommendations were more real-time but updating your preferences wasn't.
Inventory.
Insta was tapping out of how much content (and therefore ads) they could show a user. They could either find new content to show or add more ads per unit of content. There are only so many friends, who only take so many photos. Social media stopped being “social” because it just wasn’t as good of a business as generic media. There are endless influencers and videos is way more engaging. Influencer content is semi-professional content and is way better made and way more engaging than your family who posts only at big events. Meta is very data driven, and they understand exactly how reels is increasing duration of app sessions - which means more ads.
YouTube is close to losing that preservation. It's so slow and clunky to load in the desktop browser that I'm finding myself using it a lot less. It's absurd how heavy it is now.
UX is getting worse too, e.g. the save to list dialog closing after adding to a single list instead of allowing multiple to be selected. It wouldn't be so bad if it didn't take forever to open.
A few things I can’t stand about Youtube’s desktop website:
1) Spacebar sometimes skips to the next video when playing a playlist. Just why?
2) You never know if the small buttons like play next on the thumbnails will work or just play that video right away.
2) when on the homepage, you open a few videos in new tabs and close the homepage only to find out that you just open bunch of “this video contains paid promotion” disclaimer pages. Re-open the homepage to actually open the videos and they are all gone, the page shows a grid of different videos.
so yes, I agree that the web interface went downhill.
glad it’s not just me. we used to have multi-playlist saves with a modal that showed more than three pixels of your library. now it’s slow, cramped, and forces you to hit SAVE over and over even though the backend supports it. feels like a regression dressed up as bad UX.
I am using it less because I can't find any videos as the search is completely broken (no, I won't enable history tracking). Many days when I am in the mood to watch videos, I just give up. It doesn't help now that most searches return AI-generated video (that has millions of views). Who watches these things?
For a lot of the early years, it lost a lot of money. Providing the bandwidth, getting distribution closer to the ISPs etc was a major investment. Lots of dark fiber.
A bit like Google Maps though, a great visionary early investment that they then poured a lot of $ into to make them what they are today. No one else was just providing free satellite imagery for the entire world back then, not even Google Maps.
The investments to support these two products at least, have been really important in helping Google maintain its hold in other places too.
Lots of people still whinge about youtube, but standing up a solid competitor would take too many $ for anyone but other big tech now.
To be fair, goog has been investing heavily in youtube for ~20 years, and executing pretty well overall, it wasn't a foregone conclusion.
Which certainly raises the question: are they in fact making money overall on youtube? Considering not just the initial acquisition cost, but also the further investment they put in over the years. I'm not sure how one would find out, but it isn't the slam dunk obvious case that the OP was implying.
> are they in fact making money overall on youtube?
if they weren't, won't it make sense to drop it? So by empirical observation of the outcome, it seems like youtube produces enough value to google that it is worth the investment!
Now if you ask whether youtube is financially net-positive; ala, if youtube were to be spun off as an individual/separate entity without being owned by google, then that's another question altogether. I have doubts it is financially net-positive without the leverage that google provides in utilizing youtube's assets.
If I remember correctly it wasn't even making any remarkable money in the past.
Post-acquisition, Google employees made a number of smart moves with good execution, including a viable comp model for the creators and music rights deals. Several moves I consider bad as well, but the good moves outweigh them.
Looking back, I’m still pretty amazed they got so much of it right. Which is to say, a good chunk of the value wasn’t in the value of YouTube itself but in what Google brought to the table _or_ a synergy between the two.
I’m not sure how true it is but I remember reading the story where Google saw YouTube as the better choice because those guys are down the road, against their other competitors that they were trying to buy.
It's a bit of a white elephant— very valuable, but very expensive to own.
Yes, but how much of that success was driven by access to Google infra, adtech, and cash?
LOL!!!
Absurd? YT was acquired for 1.5 billion USD back in 2005 / 2006. (Google was already a billioncompany back then)
I tell you one thing: They are sitting in the basement each evening, counting the cash and laughing their ass off :-D :-D
Guaranteed :-)
This was by far one of the most strategic decissions they ever made.
Yeah don't worry you were in a crowd of 99% of people that thought the same thing.
Another acquisition, arguably even better, is Instagram. Most people got that wrong too.
Even WhatsApp.. that number was insane...
Not sure if WhatsApp paid off, though. There are reports of up to $1 billion in annual revenue with the Business API, so this is far less than what they paid. I think Meta's strategy was to create a Western version of WeChat, which has a very high ARPU, but for some reason, they never invested in it properly... They added Stories, a "Venmo" feature, and then gave up.
I think that's an example of the opposite, the number was huge but how much revenue is being driven by WhatsApp? I think that would be a hard one to put a number on. I'm sure it's important for Meta overall, but it's not directly driving ad or subscription revenue.
That's the weird thing about WhatsApp though.. back when they bought WhatsApp it was still a paid service and a lot of people actually paid for it and it was on its way to get to a billion active users.
After that acquisition, they made it free for all and started chasing the $$$ with WhatsApp for business. And ads. No idea which is more profitable anymore. I think they'd still be able to monetize it more with WhatsApp payments and those ads in status updates. I'd definitely like to know what the numbers are looking like these days..
> it was still a paid service and a lot of people actually paid for it
It was, but it was very cheap (UK pricing was £1 a year), and I believe had lots of free users anyway. My guess is that the revenue wasn't worth pursuing.
Whatsapp claims to be E2E encryption, but it can still submit anonymous("") metadata("") At least they can identify you and your contacts by real phone number, real name and nicknames, and more often than not real pictures; the information can be crosschecked across all your contacts who in good faith provide good information.
There are also bussiness accounts which are really important depending on the location.
It is very hard to put a price to that, but its value is undisputable.
This is exactly my point. I'm sure there's lots of intelligence that Meta can attribute value to, in a complex attribution process, but I doubt that it's as simple as a revenue stream or P&L.
> the number was huge but how much revenue is being driven by WhatsApp?
Meta isn't a charity. If they aren't making money off WhatsApp outright, the users are the value and they're making money off them some other way, encryption be damned.
Meta gets to spy on the communication habits and networks of half of the planet through Whatsapp. Since Meta is essentially a mass surveillance company, the acquisition makes a lot of sense.
9326392302
The story of this is actually pretty interesting. Everyone had been tryign to do video-on-demand and failing, basically. Including Google. Google had a product called Google Video that failed pretty spectacularly.
Youtube came along and was basically spending money like there was no tomorrow. Well, for the time. It's nothing compared to the current crop of AI companies. So with Youtube, everybody was terrified of the bandwidth costs, with good reason. The cost to build a sufficient network was exorbitant using off-the-shelf hardware.
Google runs their own networking hardware and servers at the efficiency level at the time that was unprecedented. They measure things in a unit called PUE (power unit effectiveness). That's basically how many Watts each Watt of computing power cost. Things like cooling would eat that up. Typical data centers at the time were at like 1.5-2. Google's own data centers were more like 1.1. Google was actually lying and saying it was 1.2 and people didn't believe it was that low. The best Google data centers are I believe more like 1.05-1.08 now. Passing cooling and that sort of thing contributes to this.
So Google of anyone had the cost controls on computing power and and networking like nobody else. And Youtube was burning VC cash. That's why they got it so "cheap".
This still created huge problems for Google and as Youtube continued to grow it was heavily impacting national ISPs, peering connections and the like. When Youtube was acquired they came up with a bandaid solution (called Bandaid) where they bought commercial server racks from Dell and elsewhere and loaded their own software on them. They would give them to big ISPs. The software would locally cache the most popular Youtube videos to cut on the ISP's bandwidth costs and the latency. I believe that this temporary solution became permanent and continues to this day.
Nobody could monetize Youtube like Google either as in nobody else has a remotely comparable ad infrastructure and ecosystem.
And lastly, nobody could encode video like Google could. Nobody else had access to that much computing power and could use it as efficiently. That was a huge deal because the encoding requirements are massive.
So yes, it was an amazing acquisition but I think if anyone else at the time bought it, they would've failed.
At this number, YouTube would place 72nd on the Fortune 100 by revenue, and if extracted out of Alphabet, the rest would still be 11th place.
I'd pay more if they let me turn off shorts.
Even as paying customers we still the product somehow.
Even moreso as a paying customer: being one is a strong signal that you have disposable income.
If u turn off search history they turn all recommendations off which is actually a nice feature.
It's clearly meant as a punishment because they could easily give recommendations based on playlists and such.
lol yeah at first I was annoyed that they seem to be applying pressure on people without the history feature cause they certainly kept recommending videos to me even though I had that feature off. But a few weeks ago, the screens are all blank imploring me to turn on the history, but I actually quite like it. No more youtube doom scrolling on my phone.
I’ve found turning on the 15m daily limit (the minimum available) has been helpful.
gods look at what we have become.
> He said YouTube Premium - its service letting users pay to remove ads between videos, or songs on its music service - had helped boost paid subscriptions across Google consumer services to more than 325 million in 2025 overall.
Out of the 60bn they made only 325 ml from paid subscribers. The title made it like it was an important figure. There's also no YOY numbers or profit so it's difficult to draw a conclusion.
325M is the number of subscribers, not revenue. Revenue from paid subscriptions is estimated to be about $20B [1]
[1] https://outlierkit.com/resources/youtube-60-billion-revenue/
And still no information about how much of the subscription revenue is shared with the content creators. Feels like YouTube is dumping all the money to shorts and other creative accounting, and giving nothing to the creators.
Recently a significant percentage of the folks I follow stopped making videos.
325 million dollars or paying subscribers (each of whom pays more than a dollar)?
It's 325 million subscriptions, not $325m.
Yes, and also 325 million subscribers for all of Google, not just YouTube.
> The figure, which totals the money generated through advertising on YouTube as well as paid subscriptions, far surpasses streaming rival Netflix's $45bn revenue.
I wonder if this is a fair comparison, though. It strikes me that Netflix’ revenue model is simpler and their costs are also lower, but I guess we won’t know YouTube’s costs any time soon.
Youtube's content pipeline is free (for them - people willingly give the content to youtube!)
Netflix's content pipeline is hella expensive, due to their being boycotted by major content owners (like disney).
So i would imagine that youtube's revenue model is more efficient and thus generate a higher return than netflix's.
YouTube pays something like 55% of its revenue to creators which is effectively its cost of content.
> which is effectively its cost of content.
only if that video generated sufficient revenue to pay out - which is quite a high bar. But the long tail of content is what draws people onto youtube as a platform - so youtube derive a benefit from this long tail content that they do not pay for.
However, the long tail for netflix won't have this advantage at all (because even niche shows with low audience will cost money to produce).
Not to mention that netflix has to pay upfront for their content. Where as youtube only pays _after_ the content has had ads displayed that generated revenue.
Why would Netflix cost less to run when YT is mostly user generated content? Am I missing something? Both have to stream it
Netflix has a far smaller catalogue and can cache content in exchanges very close to the user, see [1]. Also YouTube pays their creators.
[1]: https://en.wikipedia.org/wiki/Open_Connect
Google has its Global Cache: https://en.wikipedia.org/wiki/Google_Global_Cache
One might imagine that the cache-ability is lower than Netflix, I can't comment on this, but GGC is very significant.
Netflix is a production studio with an app, Youtube is a hosting service.
500 hours of video getting uploaded a min plus processing costs (including AI) for no upfront $$s. Far simpler CDN optimization
Fewer unique video hours, YouTube pays residuals, vastly smaller library to personalize
> and their costs are also lower
How so? Netflix has to license or produce all their content.
> He said YouTube Premium - its service letting users pay to remove ads between videos, or songs on its music service - had helped boost paid subscriptions across Google consumer services to more than 325 million in 2025 overall.
325 million people that don't know about Firefox and uBlock Origin?
I pay for YouTube premium and it’s one of my happiest expenditures. YouTube is a miraculous, unbelievable treasure trove. Learn any language, any musical instrument, any academic subject. TV clips from the 80s that someone taped in VHS for some reason. Isaac Arthur, Veritaseum, numberphile. I’ve gotten more value from YouTube than any other single site on the internet, and it’s not close!
So yeah, take my $13.99/month
It's not Youtube that is the treasure trove. Human knowledge and endeavour is the treasure trove.
Youtube is just profiting from it, by shoving mostly shitty ads in your face.
Just because it was the first one to gain traction..
I want to use it on my Apple TV and don’t want to fiddle around with VPNs. It’s the only streaming service I pay for and I’m happily doing it. It also pays creators I’m watching which is a nice feel-good benefit.
There's smarttube for Android TV like nvidia shield, no ads and sponsorblock. Can just donate directly to creators or use patreon.
Does using Firefox allow me to play YouTube in the background or download videos to my iPhone/iPad for long journeys? No, it doesn't.
Revanced youtube lets you play in background, nexttube can download. But guess they aren't available on iphone.
yt-dlp does
Tell your friends and family about Napster offline. Theres nothing to gain by talking about it anymore on the open internet
It is very amusing to read HN comments that complain about the "enshittification" of free platforms while simultaneously mocking those who would pay for stuff they like. YT is dollar for dollar the best digital subscription I pay for and I pay it gladly.
I don't think one should mock people who are paying for youtube. If they find it's good, then it's laudable to pay for it. But that said, I personally can't relate to that position. There just isn't any content on youtube that I find interesting enough that I would pay for it. It's a time waster for me, not something I seek out because it's a compelling way to spend my time.
Youtube has reached the terminal stage of enshittification:
• the good stuff is VHS-quality TV content that somebody pirated
• the ads, once nonexistent, are typically disreputable and now incessant
• the few 'creators' worth watching are lost in an ocean of audience-captured, brain-dead garbage "hey guys... [product placement disguised as organic content]... misinformation... remember to like and subscribe... [product placement disguised as organic content]"
• access becomes increasingly arcane due to ad-blocking measures
• one of the lowest quality comments sections - largely inorganic, rogue state-sponsored - on the internet
• increasingly just AI slop
The day I can't scrape videos via yt-dlp is last day I permit youtube domains on my network. Personally, I would prefer to eat a rotten cat carcass than pay a single cent to Youtube.
In a better world, youtube would be some kind of a protocol, not a mediocre company serving as a middleman.
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Ironically iPhone helps them earn more. Most apple device owners have no choice or awareness.
I happily watch adless YouTube on an iPhone. There are definitely choices available. I agree on the awareness though.
Mobile app compatibility is presumably the biggest seller.
i am a subscriber as firefox + ublock origin does not work on phone (on android, i think? last time i checked) and neither on smart tvs (mine is rokutv)
NewPipe and IronFox (hardened Firefox) for Android, although I suspect these need to be "sideloaded" as Google won't allow them on the Play Store. (I run Graphene so this does not apply to me.)
For the TV, I would suggest VacuumTube (a frontend to the Leanback interface) on a free/libre box running Linux.
Firefox + uBlock Origin works just fine on Android.
I'm currently using Firefox + ublock origin on Android while typing this...
SmartTube and Revanced
Firefox and ublock origin won't help you play music in the background on your iphone while using another app......tons of other situations like that. Think a bit more instead of wasting peoples time with pointless and braindead comments please. I say this as an android/linux user.
~~your iphone
It works on Android and PC.
I use Firefox and uBlock Origin but still pay for premium because I want to support the channels I watch but don't want to watch their ads.
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YouTube is replacing my Netflix now, honestly. But I am not happy it being just an algo game, so I am building tubeandchill.com to find good creators, get video tips by newsletter, and more... (tell me what you want to see there, please).
It’s really bizarre to me that I pay them $80 a month for TV, but most of my value comes from paying them $20 a month for premium (family)
Oct 30, 2024~ YouTube, the video platform Google acquired for $1.65 billion in 2006, has generated $50 billion in combined advertising and subscription revenue.
That's a lot of moolah!
That's a great business in being paid to show ads by advertisers and not show ads by users.
Revenue is one thing, would be interested in learning the costs of operating YouTube at scale too.
> 'Not just cat videos anymore'
Still frankly one of the few redeeming aspects of YouTube. My feed is disastrous.
I don't think I ever look at my feed on Youtube and I'm honestly not even sure why. This might just be a byproduct of when I started using it. I don't think I even logged in for the longest time. Even today, I don't subscribe much or even like videos.
My usage of Youtube seems to be near 100% intentional, meaning I'm looking for something in particular. I just don't really use Youtube for discovery. I'm sure other people differ. But I really wonder how much of this comes down to the UI and/or algorithm just not being that good.
the closest I get really is looking at my home page sometimes and seeing what channels I've previously watched have new videos, basically.
Now compare this to Tiktok. My usage of Tiktok is 99% on my fyp. There's a follwoing tab but I basically never use it. Almost everyone I follow I've found on my fyp. It's so good too. A big part is how quickly it learns. Watch one video on a topoic and you'll quickly be prompted with others in that category.
But how much of this is just the usage patterns I have chosen with Tiktok that I didn't for Youtube for largely historical reasons? I honestly don't know.
> My feed is disastrous.
I've tested this many times. Your feed has what you watch. If it's disastrous, that's because that what you actually like to watch.
Stop watching a topic and it will go away. About 2 months later YouTube will offer it again to see if you want it, if you don't it goes away again.
I don't watch baby content. Somebody at home does, so youtube offers me that. No, we don't share accounts. No, we don't share devices. Sometimes youtube offers me Chinese and Indian content, and ads.
I seems your feed is more consistent than mine.
It adds some amount of "proxy content". But right-click or long-click and block the channel on the stuff you really don't want. Also if you watch a video you thought was interesting but it was lame, go to history and remove it.
And finally if you regularly watch stuff subscribe, it's a strong preference indicator.
I do get some junk in my feed now and then, but mostly I discover good stuff I enjoy. And that includes really small channels.
This puts an interesting perspective on all the acquisitions Google has shuttered, they must not really stand out compared to the winners.
In this category I always think of Twitter acquiring then shutting down Vine.
Now look where we are with short-form video, particularly Tiktok.
There's also a readiness from the market, not just tech alone.
As to why would someone pay for youtube when you can block ads etc. I have been paying for probably close to 10yrs it not more.
Well, first you can use youtube on your phone, tablets etc, without seeing ads ever, I didn't realize youtube has ads.
Initially, my kids would ask for toys and fast food that I knew they didn't know anything about. So I realized family subscription is way cheaper then me buying even a single $25 toy, and most of them were more expensive.
Over the years, my kids have grown healthier both in mind and body thanks in part of that subscription.
More screentime leads to healthier kids? Care to elaborate?