October 29, 2010, 8:19 AM — Google's YouTube announced Thursday that it now has served 500 million views of its paid Promoted Videos, a service it launched less than two years ago.
This news comes not long after Google CEO Eric Schmidt hinted that YouTube, which Google purchased in November 2006 for $1.65 billion, is "nearing profitability."
As anyone who uses YouTube regularly knows, ads are becoming increasingly prevalent on the site, which is the fourth most popular destination on the Internet, attracting 90 million unique visitors each month, according to Google. The company recently said that YouTube now monetizes 2 billion views per week, which is about 15 percent of total views, but up 50 percent over last year.
The way Promoted Videos works is that advertisers upload their video to YouTube and choose keywords they want to trigger a promotion. This will enable the advertiser's video to appear next to relevant search results. Advertisers only pay YouTube if a user clicks on their video.
Google claims it has "seen a more than six-fold increase in the number of times viewers have clicked to watch a Promoted Video." The company also says "many video ads reach over 1 million video views," though some specific examples would be nice.
Chris Nerney writes about the business side of technology market strategies and trends, legal issues, leadership changes, mergers, venture capital, IPOs and technology stocks. Follow him on Twitter @ChrisNerney.