Is YouTube Really Now Worth More Than $70 Billion?

I’ve argued for years that YouTube is “bigger than a breadbox.” But, even I was surprised last week when I read that the team at Bank of America Merrill Lynch had said YouTube, which was acquired by Google in November 2006 for $1.65 billion, would now be worth more than $70 billion on its very own. To put this in perspective, eBay has a market cap of just over $70 billion, while  Twenty-First Century Fox and Time Warner each have a market cap of just under $70 billion.

Now, I am not a financial analyst so, the information I’m about to provide is for information purposes only. The Information is not intended to be and does not constitute financial advice. It’s just marketing advice. It is general in nature and not specific to you. So, before using this information to make an investment decision, you should seek the advice of a qualified and registered securities professional and undertake your own due diligence. In other words, I’m not responsible for any investment decision made by you. You are responsible for your own investment research and investment decisions.

YouTube: U.S. Users Watch 10 Videos a Day

Nevertheless, before your next YouTube marketing plan uses any of the assumptions that the Bank of America Merrill Lynch (BofAML) analysts published in their note last week, you should at least question them. And you may discover, as I’ve discovered, that some are a tad too bullish, while others are kinda, sorta bearish.

For example, the BofAML analysts stated that according to comScore, YouTube’s time spent per U.S. user is 7 hours per month, which is less than Facebook, but is higher than Instagram and Twitter. The analysts also indicated that users watch an estimated 10 videos a day.

By comparison, Compete PRO reports the average stay on YouTube.com (13:40) trails the average stay on Facebook.com (18:02), but is higher than Twitter (5:44) and Instagram (4:18). However, Compete PRO also reports YouTube.com gets 6.93 pages per visit. So, your mileage may vary.

The BofAML note said,

“YouTube has over a billion users, with 128 million in the U.S. alone.”

Now, YouTube probably has more than 1 billion users worldwide. That’s what they say publicly on their own Statistics page. But, the only place that I can find which says YouTube attracted nearly 128 million users in the U.S. is a Nielsen Wire from August 2011. By comparison, the comScore Video Metrix service has said Google Sites, driven primarily by video viewing at YouTube.com, ranked as the top online video content property in April 2015 with 152.8 million unique viewers in the U.S. And comScore has also said that YouTube had 139.0 million mobile users in the U.S. that month. Finally, according to Compete PRO, YouTube.com had 160.0 million unique visitors from the U.S. in April 2015.

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The BofAML note also said:

However, the BofAML note also claimed, “15 million partners receive payments from the YouTube network.” In contrast, YouTube’s Statistics page says, “More than a million channels in dozens of countries are earning revenue from the YouTube Partner Program, and thousands of channels are making six figures per year.” Meanwhile, Tubular Labs database of 2.3 million creators reveals only 21,000 are generating 1 million views or more per month.

YouTube annual revenues

How would different data alter the BofA Merrill Lynch Global Research estimates that YouTube’s gross revenue will hit $8.2 billion in 2015 and $12.8 billion in 2017? Hey, I’m just a marketing guy. But, I was the VP of Marketing at a dot-com that raised about $95 million in a couple of rounds of financing back in 2000. And, for what it’s worth, the team that helped us to raise that money was from Merrill Lynch.

What do I have left from that era? I’ve got a couple of awards and The .Com Edition of Monopoly. In case you’ve never played, all the money in The .Com Edition is in millions of dollars, so even the smallest bill has seven figures. And the board is made up of 28 of the hottest web sites of that era, including: Yahoo!, Lycos, AltaVista, and CNET.

And here’s the only strategic advice that I have from that era that’s still worth sharing: Before you write your next YouTube marketing plan, question your assumptions and undertake your own due diligence.