Google Grapples With YouTube
Updated from 12:10 p.m.
Though the video-sharing site is gaining huge numbers of users, advertisers are still leery about associating themselves with YouTube's content, which can be racy, weird or of poor quality. That reluctance may change over time, particularly for companies looking to reach the young, hip audience that's attracted to YouTube, analysts and advertisers say.
"Will YouTube siphon dollars away from Google (GOOG) and Yahoo!?" asks Martin Pyykkonnen, an analyst with Global Crown Capital, who rates both shares as overweight. "I don't see that right now."Analysts expect advertisers to stick with the sites they know, such as the New York Times (NYT) and Disney's (DIS) ESPN. They also will avail themselves of whatever video advertising services Google eventually puts up. Wall Street knows that YouTube will eventually have to sell more advertising without alienating its core audience. There already is speculation among bloggers about whether a big media or Internet company will buy the site, which, like its rival MySpace, has yet to turn a profit. A YouTube spokeswoman didn't comment. In other media interviews, YouTube executives have stressed that they are looking to build their service and aren't focusing on a short-term payout.
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