What Benefit For Google (GOOG): YouTube Traffic Up, Overall Visits To Video Sites Down

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Google’s (GOOG) YouTube had a 78% market share among video websites in March, up from 55% a year ago. Most other sites lost share over the period and overall video category visits were down 7%.

Ranking as No.2 among video sites was News Corp’s (NWS) MySpace which had a share drop from almost 18% in March 2007 to 9% last month. Hulu, the new video site set up by several major media companies, came in at No. 22, according to Hitwise.

The report raises two critical issues. The first is why total visits to video sites are dropping?  Perhaps the novelty of these properties has worn off or the lack of quality content at most sites is not holding visitors..

Also at issue is whether any of these websites can ever make money. YouTube does not appear to bring in any significant revenue for Google. When the search company announced its earnings for Q1, the market may be able to determine if that is still correct. 

A year ago, video was "the next big thing" for making money from the internet. Now, it is no better off than another huge loser–social networking.

Douglas A. McIntyre