Despite millions of visitors to video sharing site YouTube, Google hasn’t managed to find a key that unlocks the magic box of revenue for the site.
Google’s origins as a garage startup, like several other Silicon Valley legends, meant the founders could quickly break down problems as they arose. Little gets in the way of communication between two people fixed on a vision.
The passing of several years saw Google reach brand-name status, as its reach and its corresponding corporate structure grew in size. That growth brought along the usual kudzu corporations see, snaking vines of bureaucracy and procedure that cover all they touch.
As Google’s North American head of advertising and commerce, Tim Armstrong, told the Wall Street Journal, YouTube’s system of selling what few ads it can contained plenty of inefficient processes.
“Barnacles started to build up on the outside of the process,” he said in the report.
Other factors besides virtual hull-clutching barnacles hinder Google’s ability to turn YouTube into an ATM of ad revenue. The Journal mentioned the ongoing billion-dollar Viacom lawsuit, which appears destined for litigation.
Part of YouTube’s ability to keep safe harbor status under the Digital Millennium Copyright Act means it can’t toss ads alongside copyrighted content without permission; putting their AdSense units into a video page template could expose it to more lawsuits.
They also face sensitive advertisers, who do not want their ads dropped next to videos that could harm their public reputation. Couple that with Google’s difficulties finding a workable video ad format, and YouTube advertising in the short term could look a lot like TV’s model of commercials.
