• Cnet News.com, Friday, August 8, 2008 11:31 AM

If Web video spending is going to eclipse TV's $50 billion, it won't be thanks to Google's YouTube, executives claimed at the RBC Capital Conference on Thursday. User-generated videos don't draw significant ad dollars because many advertisers think it's too risky to have their brand appear next to content uploaded by consumers. According to one exec, user-generated videos may never make money. "It will be like instant messaging. It's ubiquitous, but no one makes money on it," said Thomas Wilde, CEO of Everyzing, a digital audio and video hosting company.

Take YouTube, for example. It's the No.5 Web site, but a recent Wall Street Journal report pegged the video sharing giant's 2008 revenue at less than $200 million. Meanwhile, Fortune estimates that it costs Google $1 million per day in bandwidth fees to keep YouTube running.

Suranga Chandratillake, CEO and founder of video search service Blinkx, says that for video sharing to make money, "It will have to be a very different kind of advertising. If someone does figure it out, then Google will be in a good position," he said. Others pointed out that YouTube has lots of inventory that's hard to monetize, while professional content providers like Hulu don't have enough inventory to keep up with advertiser demand. "I don't think it's going to be a $50 billion business, but it's going to be a more efficient business, one that's targeted and relevant," said Brandon Berger, an executive at MDC Partners, a holding company for several digital advertising agencies.

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