YouTube and making money

This seems bizarre to me:

But it might surprise you to learn that one of the largest and most-celebrated new-media ventures is burning through cash at a rate that makes newspapers look like wise investments. It's called YouTube: According a recent report by analysts at the financial-services company Credit Suisse, Google will lose $470 million on the video-sharing site this year alone. To put it another way, the Boston Globe, which is on track to lose $85 million in 2009, is five times more profitable—or, rather, less unprofitable—than YouTube. All so you can watch this helium-voiced oddball whenever you want.

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YouTube isn't alone in Poor House 2.0. Yahoo bought the popular photo-sharing site Flickr in 2005, and though the service might be marginally profitable, it certainly hasn't added appreciably to Yahoo's bottom line. (Yahoo similarly doesn't break out Flickr's financials.) Facebook provides an even better example. The social network is running up a huge tab to store and serve up all the photos, videos, and other junk you stuff into your profile. Last year, TechCrunch reported that Facebook spends $1 million a month on electricity, $500,000 a month on bandwidth, and up to $2 million per week on new servers to keep up with its users' insatiable photo-uploading needs. (Members post nearly a billion photos every month.) But Facebook gets relatively little in return for storing all your memories. Ad rates on its network are terribly low, the company doesn't make a profit, and it hasn't shed any light on how it will make good on investments that valued the company at $15 billion.

It's weird to me that YouTube pays for content, instead of the other way around. I don't know anything about it, of course, but why aren't Fox, NBC, ABC, etc, paying YouTube for space in exchange for letting them put up whatever kind of ads they want on their videos? And why doesn't YouTube have tons more ads? Even if the problem is figuring out who the market is, some companies (auto insurance, Coca Cola) have an interest in reaching every single demographic, which YouTube can do. It is quite confusing.

Fixing Facebook also looks pretty straightforward: limit the number of pictures people can have, or make them automatically expire. Deactivate inactive accounts. Eliminate or limit profiles from outside the US (which apparently costs a lot more). Sell more user data. And why are separate developers creating all the applications? The games, especially chess, are the only reason that a misanthrope like me checks Facebook every day.

Or, thinking a little bigger, make Facebook into more than just a social networking site. Put in a newsfeed, a way to check email, etc. Maybe even add a search engine in conjunction with Google or someone else -- essentially a Yahoo! homepage with your social network included. I know people who would make that their start page. In fact, I'm kind of surprised they haven't done this already.