After years of secrecy, Google is finally providing a peek at YouTube’s finances. It’s something Wall Street long clamored to know, but Google’s management has steadfastly resisted. Instead, Google blended YouTube’s results with revenue from its search engine, email, maps and other digital services. But things have changed as Sundar Pichai became CEO of parent company Alphabet in December, replacing Google co-founder Larry Page. Alphabet delighted investors by revealing YouTube’s revenue for the past three years.
The numbers were as impressive as many analysts suspected, providing further evidence that Google got a bargain when it bought YouTube for $1.76 billion in 2006. YouTube’s advertising revenue of $15.1 billion makes it one of the world’s biggest marketing machines. In the digital arena, only Facebook and Google’s non-YouTube services generate more ad revenue. Among video services, YouTube ranks behind Netflix’s ad-free subscription service, and easily outstrips traditional broadcast networks such as ABC and NBC. What still isn’t known is how much YouTube makes after paying ad commissions to its top video producers and covering other expenses.