On YouTube's official blog, Cristos Goodrow, vice president of engineering at YouTube, the huge video site, owned by Alphabet Inc. (GOOGL), reported its traffic had reached a remarkable milestone:
A few years back, we made a big decision at YouTube. While everyone seemed focused on how many views a video got, we thought the amount of time someone spent watching a video was a better way to understand whether a viewer really enjoyed it. It wasn’t an easy call, but we thought it would help us make YouTube a more engaging place for creators and fans. And last year, we hit a big milestone on that journey: people around the world are now watching a billion hours of YouTube’s incredible content every single day!
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Google, the former name for Alphabet, bought YouTube in 2006 for $1.65 billion. For years, it was not a major contributor to Google revenue. Recently, that has changed. YouTube's revenue last year was pegged at over $10 billion.
YouTube has experimented with several business models. Among those are paid premium video services, meant to compete primarily with Netflix Inc. (NFLX) and Apple Inc. (AAPL). However, YouTube has never been a major player in this business. Instead, Alphabet management has recently focused on video advertising, which tends to carry hefty premiums over traditional online advertising. Recently, Apple, Mr. Clean, Budweiser and International Business Machines Corp. (IBM) have been large advertisers, based on data from the January YouTube Advertiser Leader Board.
CNBC pointed out that YouTube has become more popular than Netflix and Facebook Inc. (FB) combined.