UPDATE 1-YouTube to share ad money with more video makers

* YouTube extends partnership program to more video makers

* New program initially available only in U.S.

* Says program will attract tens of thousands of partners

By Yinka Adegoke

NEW YORK, Aug 25 (Reuters) - YouTube, the world's most
popular video sharing site, said on Tuesday it will start
sharing advertising cash with users who upload the most popular
clips of everything from skateboarding dogs to dancing babies.

The video site, which is owned by Web search giant Google
Inc (GOOG.O), said it will extend its YouTube partnership
program to allow individuals to make money when their videos
are deemed eligible based on the number of views and how widely
they are shared with other users.

YouTube has been criticized by some Google investors, who
complain that the site has failed to capitalize financially on
its immense popularity.

Until now, users who regularly produced videos could earn
revenue from YouTube if they formally applied to be members of
the partnership program, which YouTube said has earned some
video producers "thousands of dollars."

Under the new system, if a video becomes popular YouTube
will email the maker an "enable revenue sharing" message.
Executives declined to quantify how popular a video would need
to be for its owner receive the email. YouTube said it will
sell ads against the clip only if the user agrees to do so.

One recent example of a clip that became a global
phenomenon was the JK wedding dance video, which showed a
Minnesota couple's wedding party performing an entrance dance
routine. It was seen more than 10 million times in less than a
week and picked up by various TV news outlets. But according to
YouTube executives, the makers never made any money from the
clip.

The extension of the program, to be available only in the
United States initially, is the latest step by YouTube to
improve its ability to make money from the thousands of videos
that are uploaded to the site every day.

"We think there's tens of thousands more partners that we
can generate through this content," said Tom Pickett, director
online sales at YouTube.

Goldman Sachs estimates that YouTube will post revenue this
year of about $300 million, and that the figure will increase
by at least 40 percent in 2010. Analysts at Credit Suisse,
however, have estimated that YouTube could lose nearly $500
million this year.

As part of its drive to increase revenue, YouTube has
sought to increase the number of videos from traditional
television and movie companies, encouraging more big-brand
marketers to buy more advertising time. Earlier this month it
signed a deal with Time Warner Inc (TWX.N) for clips of shows
from CNN, TNT, Cartoon Network and Warner Bros.
(Reporting by Yinka Adegoke, editing by Gerald E. McCormick
and Matthew Lewis)