It's a great time to be Youtube.
On Tuesday, it released its very own iPhone app - finally putting down the crippled, rage-inducing, Apple-produced fare offered preloaded on every iProduct since 2007.
Let's ignore for a second how much easier it will be to share 'Gangnam Style' with my friends on the go and focus on Youtube. Youtube can now roll ads before videos played through the app.
Okay, yes, Youtube and ads: no revolutionary concept there. But let's (roughly) crunch some numbers to get an idea of just how beneficial this is going to be for the company.
One study finds that 63% of iPhone owners in the U.S. use the Youtube app (with no ads). That's a pretty hefty (and affluent) market. Now that Youtube can run ads, you can bet marketers are going to jump at the chance to buy placement in front of a captive audience.
Consider also the state of the mobile advertising industry: it is where the growth is really happening. The cost of advertising in this space is rising 20% on average, while more and more people are accessing the Internet from mobile devices. Youtube traffic, for example, increased three-fold in 2011 while 20% of all video views globally come from mobile. Ad costs will continue to rise as the mobile market gains weight, while Youtube specifically will likely see marketers stampeding towards them to access their bulging user base.
Are you sure it’s an Internet video app and not an app that prints money?