July 9, 2008 / 4:53 AM / 11 years ago

Google's YouTube ad revenue short of expectations: report

A man looks at YouTube's web site in a file photo. REUTERS/Peter Jones

SAN FRANCISCO (Reuters) - Advertising revenue from YouTube is likely to total about $200 million this year and thus fall short of parent company Google Inc’s <GOOG.O expectations, The Wall Street Journal said on Tuesday, citing two sources familiar with the matter.

Google also has significantly cut the number of YouTube clips it will sell ads against, so as not to sell them against videos that may violate copyrights, the newspaper said, citing one source.

Google and YouTube are being sued for copyright infringement in two cases involving YouTube and a second suit where the lead plaintiff is the English

The Internet advertising leader only sells ads against clips posted on YouTube that are approved by media companies or other partners, which represent just 4 percent of the clips on YouTube, a source said.

Much of the remainder are user-generated clips where rights are uncertain and where advertisers may be nervous about placing their ads against videos of unknown origin.

Google also plans accepting “preroll” and “postroll” ads to run before or after some YouTube clips. These ad formats, while considered effective with advertisers are often unpopular with Web users, one of the sources said.

The Journal reported that Google North American ad sales chief Tim Armstrong has been scrutinizing YouTube’s ad sales system and that he and his colleagues had identified 105 problems with YouTube’s ad sales, again citing one source.

“Over the past several months we’ve learned a lot about what works and what doesn’t for our community and our advertisers,” a YouTube spokesman said. The spokesman declined to comment on specific figures in the Journal report.

Reporting by Ajay Kamalakaran in Bangalore and Eric Auchard in San Francisco; Editing by Jacqueline Wong and David Holmes

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