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.
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.
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.
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.
> 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.
> 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.
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.
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.
[+] [-] bradgessler|1 month ago|reply
[+] [-] mrtksn|1 month ago|reply
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.
[+] [-] Quarrel|1 month ago|reply
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.
[+] [-] CuriouslyC|1 month ago|reply
[+] [-] aamar|1 month ago|reply
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.
[+] [-] Brajeshwar|1 month ago|reply
[+] [-] kibibu|1 month ago|reply
[+] [-] almosthere|1 month ago|reply
[+] [-] dlcarrier|1 month ago|reply
[+] [-] jmyeet|1 month ago|reply
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.
[+] [-] KellyCriterion|1 month ago|reply
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.
[+] [-] aurareturn|1 month ago|reply
[+] [-] danpalmer|1 month ago|reply
[+] [-] Briannaj|1 month ago|reply
[+] [-] davet91|1 month ago|reply
[+] [-] siavosh|1 month ago|reply
[+] [-] senectus1|1 month ago|reply
[+] [-] foretop_yardarm|1 month ago|reply
[+] [-] langarus|1 month ago|reply
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.
[+] [-] anxrn|1 month ago|reply
[1] https://outlierkit.com/resources/youtube-60-billion-revenue/
[+] [-] Buttons840|1 month ago|reply
[+] [-] MarleTangible|1 month ago|reply
Recently a significant percentage of the folks I follow stopped making videos.
[+] [-] danpalmer|1 month ago|reply
[+] [-] unknown|1 month ago|reply
[deleted]
[+] [-] unknown|1 month ago|reply
[deleted]
[+] [-] stingraycharles|1 month ago|reply
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.
[+] [-] chii|1 month ago|reply
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.
[+] [-] dolphinscorpion|1 month ago|reply
[+] [-] sowbug|1 month ago|reply
How so? Netflix has to license or produce all their content.
[+] [-] drnick1|1 month ago|reply
325 million people that don't know about Firefox and uBlock Origin?
[+] [-] emtel|1 month ago|reply
So yeah, take my $13.99/month
[+] [-] dewey|1 month ago|reply
[+] [-] akanet|1 month ago|reply
[+] [-] mlindner|1 month ago|reply
[+] [-] tebbers|1 month ago|reply
[+] [-] throwawaygmbno|1 month ago|reply
[+] [-] faust201|1 month ago|reply
[+] [-] lanternfish|1 month ago|reply
[+] [-] ekianjo|1 month ago|reply
[+] [-] desireco42|1 month ago|reply
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.
[+] [-] j45|1 month ago|reply
[+] [-] jmyeet|1 month ago|reply
Now look where we are with short-form video, particularly Tiktok.
[+] [-] strzibny|1 month ago|reply
[+] [-] CHB0403085482|1 month ago|reply
That's a lot of moolah!
[+] [-] daft_pink|1 month ago|reply
[+] [-] seeg|1 month ago|reply
[+] [-] gnarlouse|1 month ago|reply
Still frankly one of the few redeeming aspects of YouTube. My feed is disastrous.
[+] [-] jmyeet|1 month ago|reply
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.
[+] [-] ars|1 month ago|reply
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.