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Saturday, June 12, 2021

Why AOL’s dropping YouTube is good news for Google

AOL, now part of Verizon, dropped Google’s YouTube as the main search engine on Thursday in its home page.

The change doesn’t bode well for a big Google business in video. But aside from a couple of PR messages, it’s business as usual for YouTube. People consume hundreds of billions of video clips on the video site each year, and they do so without much understanding how it made that possible.

Doing a search for a song on YouTube turns up results as opposed to music videos.

Google generally keeps the content of online ads it sells through YouTube on that site and keeps a share of the advertising money generated by YouTube itself. So if people want to see YouTube’s videos, they don’t need to know what they look like. They can simply see what they watch, and pay the same fees to watch YouTube ads as anyone else.

This arrangement, however, creates a seemingly tough — and potentially lucrative — spot for Google: the education market. Schools and colleges — especially small ones — want students to watch a lot of videos, and ideally a lot of the videos are produced on YouTube. But if they can’t attract YouTube creators to their campus, it’s a sign that the ads they pay Google for are failing to bring in the required revenue.

It’s a nuance that I’m learning about as I pursue research into how YouTube is transforming television. Even if I’m able to find one YouTube host for a YouTube host show — like I did with the successful YouTube performer Billy Eichner — YouTube’s large video footprint means a school doesn’t need many.

For those who don’t understand how a bunch of cats looking cute gets YouTube’s high profile, it’s like this: You can watch hundreds of hours of videos on YouTube. Then, depending on your information set, you may be drawn to the videos you like — or to the ones you don’t like. Most videos are of some kind of nature. One report I’ve read has concluded that YouTube users watch about 60 percent of the videos they “liked” online.

All those videos attract advertising dollars, and while YouTube doesn’t sell the ads that schools and other smaller entities do, there’s a strong case that they bring in enough money for the company to afford some of these very high margins that it’s earned elsewhere on YouTube.

It helps YouTube’s argument that YouTube’s videos are effective when compared with other popular videos online, such as the video game commentary that’s popular on other sites. And it helps YouTube that larger media companies and other internet firms — including Verizon, which is also building out a mobile video service — operate YouTube.

But YouTube doesn’t have to let schools or students have access to YouTube videos just because Google has a huge online advertising business on YouTube. Instead, Google needs to make it easy to buy YouTube videos from schools and to promote the video on school websites. A video of a famous cat on a YouTube host show that the video host hosts shows does little if anything to get school marketing materials passed around.

YouTube can look a lot like other entertainment sites, which have been enthusiastically embraced by schools. YouTube doesn’t have to be this lucrative, but it has to make YouTube interesting, as much of the quality videos come from places like “Kids Just Want to Have Fun.”

The world of online video is a world where Google knows exactly who your customer is, so YouTube needs to make it easy for schools and other educational institutions to use the video site — and have its videos present a compelling video quality to people who are looking for a way to spend a lot of time on a college campus.

Over all, Verizon and its peers are in a good position to court schools and other educational institutions for paid video views on their websites. When YouTube was the go-to school video destination, it was a profitable place to be for Google. But YouTube has lost its power and appeal as a destination for video on which schools can invest a lot of time. That’s why the search giant is pushing the day when schools pay a service like Verizon to have YouTube videos playing on their websites.

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