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What YouTube's 2 Billion Daily Views Mean to Google

Monday, 17 May 2010 | 4:08 PM ET

YouTube celebrated its 5th birthday with some impressive stats: it streams over 2 billion videos each day and 24 hours of video are uploaded to the site every minute.

Google bought the website for $1.65 billion at the end of 2006 and now its growth seems unstoppable: it doubled its number of daily views from 1 billion in October.

As more people access YouTube on their mobile devices and on their TV sets, YouTube's viewership is sure to only continue to grow.

But what's all this really worth toGoogle? YouTube's now at the point where more viewers directly translates into more revenue, according to YouTube's Director of Product Management, Hunter Walk.

The company won't officially comment on YouTube's revenue or profitability, but CEO Eric Schmidt was quoted earlier this year saying YouTube will become profitable in 2010. In January Barclays projected the website would bring in $700 million in annual revenue.

Google has successfully gotten major advertisers on board —ten times more marketers are running brand campaigns on YouTube than a year ago. Ninety-four of the top 100 Ad Age advertisers have campaigns on YouTube.

And the ad-appropriate content is there—over 1,000 content owners use Google's tools to identify their content, put ads on their videos, and share that revenue. YouTube has figured out how to quickly identify which user-generated videos are going to be huge viral hits, in order to contact the content owner to quickly start putting ads with the video.

But YouTube's revenue still hasn't caught up with its popularity, and the company's working on that. Vevo is doing a good job of monetizing music videos—a Lady Gaga video is now the most watched on the site. And YouTube is increasingly adding live sports and news events. ESPN's sure to face some new competition for the online rights to sporting events.

YouTube streamed Indian Premier League cricket matches live on YouTube, drawing 55 million viewers. If YouTube can become the go-to source for live video—on mobile devices, online, and even on your TV set—than the company will be a disruptor on a whole other level.

Questions? Comments? MediaMoney@cnbc.com

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  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.