FINALLY: Google just revealed YouTube's ad revenue, 14 years after acquiring it, and the video site brought in $15 billion last year (GOOG)

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• Alphabet, Google’s parent company, broke out revenue numbers for YouTube for the first time ever in its 2019 fiscal year results released Monday.
• YouTube’s advertising revenue grew 36% in 2019, totalling $15 billion and comprising around 9% of Alphabet’s overall annual revenue.
• Google did not break out the profitability of YouTube however.
• This the first time Alphabet has ever revealed revenue numbers for YouTube, the video platform founded 15 years ago that Google acquired in 2006.
• Visit Business Insider’s homepage for more stories.

Google revealed that YouTube’s advertising revenue totalled $15 billion in 2019, ending a longtime policy of keeping the video site’s financials under wraps. 

The results, which Google released with its fourth-quarter earnings report on Monday, come 14 years after Google bought YouTube in a $1.65 billion acquisition.

Ads on the video site now comprise about 9% of Google-parent company Alphabet’s overall revenue, which totalled $162 billion last year. 

Even as YouTube has grown into a massive site, its ad revenue continues to grow at a healthy pace, increasing roughly 36% in 2019. That’s a much faster pace than Google’s overall ad revenue, including its search ads business, which grew by only 16% year-over-year in 2019. 

In the earnings report, Alphabet chief financial officer Ruth Porat said the reason for breaking out numbers for YouTube, as well as Google Cloud and Google Search, is “to provide further insight into our business and the opportunities ahead.”

Even as Google disclosed YouTube’s ad revenue, it kept other key information about the business close to the vest, most notably declining to provide information on whether YouTube is profitable or not.

While YouTube’s popularity has exploded over the years thanks to the home-made videos uploaded to the site by users, the service also spends increasing amount of money to acquire premium content and on the computing infrastructure to handle the traffic. 

Google has also struggled to police YouTube, remvoing a never-ending flood of videos with hate speech, conspiracy theories and pornography. Those efforts require increasing investments in technology and personell, all of which weigh on YouTube’s profitability.

An early bet on video

In the 15 years since YouTube was founded, it’s grown to become one of the most popular sites for creating and sharing videos on the internet. YouTube now has more has more than 2 billion monthly users visiting the video-sharing platform, who are watching over 250 million hours each day of their favorite vlogs, music videos, sports highlights, and more.

During a conference call with analysts on Monday, Google CFO Ruth Porat said YouTube’s revenue growth in the fourth quarter was “driven by sustained growth in direct response and ongoing healthy growth in brand advertising, which remains the largest component.”

Google acquired YouTube back in 2006 for $1.65 billion. The platform is now led by CEO Susan Wojcicki, an early Google employee, who has overseen its expansion into gaming, subscription services, and children’s content.

However, YouTube’s tight grip on digital video is being threatened by the influx of new social platforms, like TikTok and Byte, and video-streaming services, such as Netflix and Hulu.

SEE ALSO: The incredible story of YouTube’s early days and how it rose to become the world’s most popular place to watch video

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