YouTube: The business that could be bigger than Google search, angel investor says

Tip of the iceberg for Google: Calacanis
Tip of the iceberg for Google: Calacanis

Google's search division may have changed the world, but another division of Alphabet will soon be worth more, an angel investor told CNBC's "Squawk Alley" on Tuesday.

"I think there's a chance that YouTube will eventually be more valuable to Google than the search franchise," entrepreneur and angel investor Jason Calacanis said. "I know that sounds crazy given what an amazing juggernaut and money-printing machine the search franchise is. But it is a truly international business and people are spending a large amount of time on it, and they're combining the branding of video-based advertising ... with the ability to target specific groups of people."

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YouTube is "six Twitters and a Tesla on top" in terms of how much money Google has made from it, said Calacanis, a dot-com era entrepreneur who most recently founded Netting as many as 30 billion total views a day, YouTube could be worth $67 billion to $86 billion, according to Bernstein Research analyst Carlos Kirjner. He estimates average users spend 40 minutes a day on YouTube, according to his report, published Tuesday.

Despite Alphabet's more segmented structure, Google doesn't disclose YouTube's precise value. But Calacanis said "it's definitely the best acquisition ... in the history of tech, that's for sure."

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YouTube is key to not only what young people are watching, but also what they're listening to, Calacanis said, with musicians holding the most popular accounts and high volumes of repeat video plays. Calacanis estimates that basic cable and live packages on YouTube are just the beginning to supercharging Google's dominant advertising network.

His comments come ahead of Google's developer conference Wednesday, where the $490 billion technology giant is likely to unveil new products. But YouTube's not the only big bet that Calacanis has, as he eyes the interests of young consumers. He's also looking for start-ups that are building on Amazon Echo's API, calling the voice activation device "addicting" for families looking to shave time off everyday tasks.

When it comes to industries like education, Echo, better known as Alexa, is "going to become a massive enterprise play," Calacanis said.