Google Tired of YouTube, Google TV Not Getting Any Respect

Last Updated Nov 1, 2010 2:01 PM EDT

Is YouTube a TV channel? Apparently, its owner, Google, would like Madison Avenue to think as much. As YouTube and Google get more serious about making the site profitable, change is afoot -- much of it having to do with getting money in the door of YouTube the old-fashioned way (via video advertising, aka commercials).

According to a report in the San Francisco Chronicle, this includes putting Google TV within the YouTube unit (although Google, according to The New York Post, has since "downplayed" the report). But wait! There's more! To the end of making YouTube a real business, there's also been executive rearrangement at YouTube itself. Last week, founder Chad Hurley said he has stepped back from day-to-day operations, in favor of Salar Kamangar, a Google exec who has been working hard on the YouTube profit picture for a year now.

As the headlines suggest, there are many cross currents here -- the chief one being that Google neither wants its Google TV, nor YouTube, to be treated as stepchildren in the video universe. Right now, you'd have to say that's the case. Last week, it became known that ABC, CBS (yes, CBS is BNET's corporate overlord) and NBC were blocking their online content from Google TV -- even as the product promises to merge online content and TV content onto the TV screen, which could only serve to heighten its TV inferiority complex.

Claire Atkinson at the Post did a nice job late last week of summing up YouTube's advertising problem. Even as it racks up two billion views per day for an average 15 minutes per, it still serves less than a third the video ads that Hulu does. Google sites, mostly consisting of YouTube, served up 242 million video ads in September, according to comScore; Hulu, which is owned by three of the four major broadcast nets served 793 million. Compare that with comScore's September traffic numbers for online video sites -- Google sites had over 144 million; Hulu had just under 30 million.

Why don't the numbers add up? Two reasons: YouTube's content is still considered questionable by advertisers looking for safe places to put their ads, and YouTube is not really part of the advertising/media cabal. As the networks' decision regarding playing ball with Google TV shows, there's lots of suspicion about what Google's greater aims are and how its encroachment on the TV business might impact more traditional media venues.

While there's always grumbling among advertisers that they aren't sure how to measure online video ads, that's really just an excuse. As the Hulu video ads number shows, the real reason for all this resistance is that the media and advertising industries have entrenched ways of doing business, and doing business with Google outside of search -- which TV ads can't provide -- changes their nice, cozy, decades-old way of doing business.

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