TobeJinS

STEVE Chen is starting to feel pressure from parent company Google to start attracting serious revenue from the site's massive audience.

Google bought the video-sharing site for $US1.65 billion in stock in late 2006, and since then YouTube has grown to be one of the most popular sites on the internet, with more than 100 million videos viewed every day.

But YouTube has been footing an ever-mounting bill to maintain the infrastructure that supports this activity, and at a press conference on Wednesday, Google CEO Eric Schmidt said it still had not found the best way to commercialise the site's audience. "We've not yet found the perfect monetisation strategy for that," he said.

YouTube's Mr Chen said the priority had always been on expanding the community first.

"When we met with (Google CEO) Eric Schmidt, and this was the day before the acquisition was going to be announced, the question was 'what priorities do you want us to concentrate on?'," Mr Chen said. "The mandate was that if you have happy users and have great content, that monetisation and working with advertisers will always come later.

"And in much of 2007 it was same policy, same strategy -- 'let's make sure we build the best product possible, and let's make sure the monetisation solutions we put out there don't anger or frustrate the users'."

Mr Chen said the trouble was balancing the interests of the site's content producers, the content viewers and the advertisers, or the YouTube "ecosystem", but he believes it has found a solution. "We did a few tests in 2007 and singled out the advertising solutions that worked well." One of the most successful advertising formats was embedding ads within the videos, which are triggered by a viewer clicking on an icon.

"The one that's working with our premium content partners is running these relevant ads that show up on the video itself. They have to be initiated or triggered by a user to watch the ad.

"By itself, you're not going to be disturbed by the video, but if you happen to see something that's interesting you can hover over it and watch the video ad in the middle of the video."

And while advertisers continue to generate free hype by way of viral marketing campaigns on YouTube, Mr Chen said there were no plans to start charging for these, at least in the short term.

http://www.australianit.news.com.au/story/0,24897,23406928-15306,00.html
Pic: Steve Chen, CTO and founder of YouTube, at Google's office in Sydney yesterday. Pic: James Croucher