Hulu May Catch Up to YouTube in Advertising Revenue

YouTube, Google's $1.65 billion acquisition, leads the online video pack with 83 million viewers in U.S. That puts the video sharing site well ahead of Hulu, at least in terms of viewers, who compares with 6 million viewers, according to market researcher Nielsen. But when it comes to advertising revenue, the playing field is much more level.

Arash Amel, an analyst at digital media research group Screen Digest, suggests that Hulu's advertising revenue is growing much more rapidly than YouTube. By his own forecasts, Amel estimates YouTube will generate about $100 million by the end of 2008, whereas Hulu won't be too far behind at an estimated $70 million. The two are expected to be dead even next year, with both companies generating about $180 million in the U.S.

"YouTube is in a very tough place right now," said Mr Amel. "Most of that user-generated content is worthless or illegal. The next 18 months will determine whether or not it was just an expensive mistake for Google."

Whether or not YouTube can retain its lead remains to be seen. Matthew Liu, a YouTube advertising product manager, notes that the site isn't where it should, but the question is, what can it do about it?