In the January comScore survey of Internet video traffic, Google sites placed well ahead of every other company measured. Most of the traffic was to YouTube. The search engine’s video sites had traffic of 174 million unique visitors. Facebook Inc. (NASDAQ: FB) was a distant second with 84.2 million unique visitors. Experts question whether either business can be highly profitable long term.
The gulf between Facebook and the next group of sites was substantial. Yahoo! Inc. (NASDAQ: YHOO) sites had unique visitors of 56.0 million for the month. Vimeo had 47.1 million, followed by CBS Corp.’s (NYSE: CBS) CBS Interactive at 45.6 million and Comcast Corp.’s (NASDAQ: CMCSA) NBC Universal at 45.1 million.
Google parent Alphabet Inc. (NASDAQ: GOOGL) has started to break out YouTube’s numbers. Listed as “other revenue,” which was primarily results from the huge video property, revenue rose 24% to $2.1 billion.
YouTube faces hurdles that other large video sites do. First, the price that companies can get for video ads has fallen rapidly, and the industry has produced an oversupply. The second is that even large video sites like YouTube have had trouble getting paid subscriptions for video on demand, which has been dominated by Netflix Inc. (NASDAQ: NFLX) and Amazon.com Inc. (NASDAQ: AMZN).
YouTube may sit in first place among its peers in video traffic. That does not make it a good business.