Henry Blodget offers a detailed analysis of the revenue contribution from the video ads on YouTube that Google announced on Tuesday. His most aggressive forecasts range from a $450 million contribution to $13 billion. (Read the blog for all the variables put against these numbers.)
YouTube's revenue won't likely be material to Google for at least a year or two and possibly more, Blodget says. What's more, the impact on the bottom line will probably be even less pronounced, he says, because serving a video ad, even for Google, is far more expensive than serving a text link. At a $20 CPM, the gross margin on such ads will likely be well below Google's current margins.
Read the whole story at Silicon Alley Insider »