Google has nurtured the growth of YouTube into a household name since the video-sharing service was acquired by the company back in 2006 for a sum of $1.65 billion.
However, while YouTube continues to attract over one billion users every month, the video-sharing website has still not been able to make profits for Google.
The online video website earned revenue of around $4 billion last year, a remarkable improvement from the $3 billion in revenue that YouTube posted in 2013, said two sources familiar with the matter to The Wall Street Journal.
The significant increase in revenue was due to a focus on the development of premium advertisements in 2014, named Google Preferred, which attracted big brands to spend more on advertising. The advertiser-friendly strategy allowed YouTube to make up around 6 percent of the overall sales of Google in 2014, but even so, YouTube is only roughly breaking even and not making any profits for Google.
According to The Wall Street Journal, one of the main problems of YouTube is that users are watching videos hosted on the website that are linked to or embedded in other websites. However, a spokesperson for Google said that the majority of the traffic on the videos hosted on YouTube comes through the host website or through YouTube's mobile apps, with roughly half of the traffic coming from these mobile apps.
Google is now looking to make users visit the homepage of YouTube in about the same way that people turn on their TVs to watch programs, with the people expecting to find high-quality content that can be accessed through the different channels.
This direction is why YouTube has been making big investments into the website's creators of original content, which includes Epic Rap Battles of History, Bethany Mota and Michelle Phan. The investments allow the original content creators to build their respective followings and create videos with better quality.
YouTube has also changed the design of its homepage, along with improving the website's video recommendation feature, to make users stay longer on the online video service.
However, sources reveal that YouTube is still struggling to attract viewers to visit the website's homepage directly, as opposed to viewers landing on YouTube through clicking on links from other websites.
Sources also reported that in a bid to further boost YouTube's revenue, there are plans to launch more automatically playing videos and a new method for targeting advertisements using the search data of Google.