Can New CEO Susan Wojcicki Fix YouTube’s Broken Business Model?

Can New CEO Susan Wojcicki Fix YouTube’s Broken Business Model?

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Susan Wojcicki, who joined Google in 1999 as employee #16, pushed hard for Google’s $1.65 billion acquisition of YouTube when it seemed like a big risk in 2006, and is the senior most woman at Google, will now become the Senior Vice President of YouTube. She replaces Salar Kamangar, who also joined Google in 1999 as employee #9, replaced Chad Hurley as head of YouTube on Oct. 29, 2010, and will be staying at the company in an unspecified role having to do with early-stage ventures.

Susan Wojcicki | Head of YouTube
Susan Wojcicki | Head of YouTube

The story was broken by Jessica E. Lessin and Amir Efrati of The Information early yesterday. They reported, “Google is likely to tap longtime ad products head Susan Wojcicki as the new head of YouTube, according to two people briefed on the discussions, a surprising move that would place one of the company’s earliest employees at the helm of the video unit.”

The leak was confirmed later yesterday in a series of emails from Google CEO Larry Page. One went to Liz Gannes of Re/code. In his emailed statement, Page told Gannes, “Salar and the whole YouTube team have built something amazing. YouTube is a billion person global community curating videos for every possibility. Anyone uploading their creative content can reach the whole world and even make money. Like Salar, Susan has a healthy disregard for the impossible and is excited about improving YouTube in ways that people will love.”

Page also sent the same email to Clair Caine Miller of The New York Times. Both Re/code and the Times also reported that Sridhar Ramaswamy, who joined Google in 2003 and became a senior vice president of advertising and commerce last year, will now run the ad business.

Although Gannes posted her story about the executive changes a couple of hours before Miller’s post, Miller added this analysis: “The move is a sign that Google is focusing sharply on advertising at YouTube. Ms. Wojcicki has overseen Google’s outrageously profitable advertising, including successful new ad types for shopping and mobile.”

Miller added, “Though eMarketer estimates that YouTube earns 21 percent of all video ad revenues in the United States and earned $5.6 billion in gross revenue worldwide last year, the site has encountered bumps in its efforts to collect a larger percentage of TV advertising.”

Miller also noted that “video creators say ad prices are dropping precipitously, while it is getting more expensive for them to produce videos that break through the noise.” And she concluded her post with this observation: “Ms. Wojcicki has had an integral role at Google. It was her garage that Google’s founders, Larry Page and Sergey Brin, rented to start the company, and she became Google’s 16th employee and later, Mr. Brin’s sister-in-law.”

So, what else is worth knowing? Kamangar was the first non-engineer at Google, and Wojcicki started in marketing. Ramaswamy is a software engineer. All three of them rose up through the ranks in the ads organization, although Kamangar also worked on products like Gmail and Docs. Wojcicki helped lead seminal projects such as image search and AdSense.

Wojcicki studied history and literature at Harvard University and graduated with honors in 1990. She also received her master’s in economics from the University of California, Santa Cruz in 1993 and a Master’s in Business Administration from the UCLA Anderson School of Management in 1998.

Adweek has called Wojcicki “the most important person in advertising” and “the most important Googler you’ve never heard of.” She is married to Google executive Dennis Troper and they have four children. She is also the sister of Anne Wojcicki, co-founder of 23andMe.

What does this mean to the internet marketers and video content producers who read ReelSEO?

In early July 2013, Search Engine Watch took a hard look at “How to Make Money on YouTube” and concluded: “The number of advertisers who are using TrueView in-stream ads needs to increase significantly and/or the amount of money they spend on YouTube advertising needs to increase dramatically, or an awful lot of poor YouTube Partners are going to face a hard decision this winter: remain starving artists or look for another day job.”

A couple of weeks later at the Video Summit in San Francisco, a keynote panel discussed the question, “Is YouTube’s Business Model Broken?

And in December 2013, Geoff Yang, a Partner at Redpoint Ventures, posted “Big Idea 2014: YouTube’s Bay of Pigs Moment” on LinkedIn. Yang wrote:

“From where I sit, this is YouTube’s Bay of Pigs moment. As you may recall, the CIA funded and encouraged rebel troops in Cuba to overthrow the Castro government. But that encouragement was not accompanied by the proper operational and air support to ensure victory. So the rebel upstarts did not prevail over the establishment. Let’s hope that YouTube does not make the same mistake and doom its chance to be pioneers in creating the next generation of content networks and unseat the traditional media establishment.”

So, it appears that YouTube may have had its “Bay of Pigs Moment” and will now fix its broken business model, helping a million partners who are trying to build a sustainable career on YouTube and beyond. Call me an optimist, but that’s what I read in the tea leaves.


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