John Paczkowski

Recent Posts by John Paczkowski

Schmidt to Cuban: Only a Moron Would Worry About YouTube

Entrepreneur Mark Cuban once said “only a moron would buy YouTube,” the implication being that Google was exactly that for purchasing the popular video site. And some would say it is. To date, the company has seen little but accusations of copyright infringement, litigation and skyrocketing legal fees from its investment. It’s been two years since the $1.65 billion acquisition and Google (GOOG) has yet to truly monetize YouTube. And, interestingly enough, that doesn’t seem to bother the company at all. In an interview with Mad Money, Google CEO Eric Schmidt said the Google was comfortable with YouTube being a loss leader. “Eventually we’d like to make money out of it,” Schmidt said of YouTube. “But if we don’t, the fact that so many people come to YouTube means they ultimately come to Google and click on ads. So we don’t worry about all that traffic going to YouTube. I’d be worried if people weren’t using YouTube. But since it’s an enormous success globally we know we will benefit.”

Plus, said Schmidt, Google’s attention is best focused where the real money is, or will be soon: mobile advertising. “We can make more in mobile than desktop, eventually,” Schmidt said. “The reason is because the mobile device is more targeted. Think about it: You carry your phone with you everywhere. It knows all about you. We can use that to do a very, very targeted ad. Over time, Google will make more money from mobile advertising.”