Today I have ready one interesting news in Techmeme that Google does not know how to make money from YouTube which is the most popular video-sharing website on internet. According to Eric Schmidt, CEO of Google, the company is still unable to convert the huge traffic on youtube into money. Almost two years after Google paid $1.65bn for the YouTube video-sharing site, it is still not a profitable website for Google, and its revenues are declared “immaterial” by Google. Its bandwidth costs are estimated at approximately $1 million a day. It is estimated that in 2007, YouTube consumed as much bandwidth as the entire Internet in the year 2000.

The goal for YouTube is to build a tremendous community. In the case of YouTube we might be wrong. We have enough leverage that we have the leverage of time. We can invest for scale and not have to make money right now, he said. Hopefully our system and judgment is good enough if something is not going to pay out, we can change it. Eric Schmidt

However, Google has future plans to start video-based advertising on YouTube. Experts are saying that it would be not be same like ‘pre and post roll’ adverts - shown before and after youtube videos. Google also tried some banners across the top of the screen while a video is played and ads by Google across the right side and to the bottom. Video viewers can click on these ads and be taken to another site.Was the YouTube acquisition a big blunder by Google ? Post your comments.