YouTube to lose $500m this year

Google-owned video site YouTube is set to lose “around” $470m this year, according to a report from CreditSuisse. Google paid $1.7bn for YouTube in November 2006.

CreditSuisse analyst Spencer Wang says YouTube, best known for its video sharing options, will generate some $240m this year, up 20% on 2007. But its operational costs and other expenses will cost it about $700m. A large portion of those costs are in paying for bandwidth, currently at around $30m a month, or some $360m annually. The problem, says Wang, is a large inventory of unsold ad-space.

Google will address the issue this time next week (April 16) when it holds a quarterly analysts briefing.

YouTube enjoyed 5.35bn web-streams in February, while new kid on the block Hulu had 333m streams.