• by Wayne Friedman , April 3, 2009

Google's YouTube is on pace to grab $240 million in advertising revenue this year -- a 20% gain. But the big digital video site is still poised to lose $470 million, according to a Credit Suisse report.

Although YouTube commands an overwhelming share of the digital video market, Credit Suisse said monetizing that value is still a problem. The main problem, according to analysts, is figuring out how to get traditional TV advertisers to buy in -- especially attached to sometimes risky or unauthorized video content.

Near-term problems, Credit Suisse says, are from the cost of bandwidth, content licensing, ad-revenue deals with content providers, hardware storage, and sales and marketing expenses. This comes to $711 million per year, giving YouTube a big net loss.

Other reports show that YouTube is moving to more quickly turn things around. One report from Jefferies & Co. said it would more than double 2008 revenues, getting to $500 million this year.

Credit Suisse says YouTube's bandwidth accounts for about 51% of expenses and content licensing, coming to 36% of its expenses. NBC Universal/New Corp.'s Hulu -- a somewhat competitor to YouTube -- has been given estimates to pull in anywhere from $120 million to $180 million in advertising revenue in 2009, but at a fraction of the YouTube usage.

For example, Hulu had 333 million streams in February compared to YouTube's 5.35 billion.