Reply to post: Youtube as a loss leader

US watchdog just gave up trying to get Google to explain YouTube's huge financial figures

DougS Silver badge

Youtube as a loss leader

I have no idea if that's the case, but let's say that's true - it is still utterly ridiculous for Google to claim that the CEO of Google, or the executive in charge of Youtube, can't see figures for revenue and cost for Youtube. Just because a business decides to pursue a loss leader strategy doesn't mean they don't care how much loss there is.

Let's say you have a grocery store and decide to make milk a loss leader. You still care how much that loss is - because the whole "loss leader" premise is that you will make it up via greater overall sales. Lose $500 a day on cheap milk and make an extra $1000 from the increased traffic that results.

It isn't clear to me how Youtube as a loss leader is going to lead to more money elsewhere in Google, but that would have to be the case for it to be a valid business strategy rather than an illegal anticompetitive tactic. And you have to know how much Youtube is losing to know whether it is paying off overall when you add in whatever extra revenue that strategy somehow brings in.

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