Last Updated on 06/29/2021 by GS Staff
Q: Is YouTube Publicly Traded?
YouTube alone is not a publicly-traded company. However, YouTube is owned by Alphabet Inc. Alphabet, who also owns Google, is a publicly-traded company. If want to own a piece of YouTube, you can purchase Alphabet stock.
How To Buy YouTube Stock?
Alphabet trades on the Nasdaq under the symbol GOOG. The stock can be purchased through any major online broker such as ETrade, Robinhood, TD Ameritrade, and Ally Invest. The stock was priced at over $2,100 per share and did not pay dividends at the time of this article
When did Google acquire YouTube?
Google (not yet called Alphabet at the time) acquired YouTube in November 2006 for $1.65 billion. Many people believed that Google overpaid for the online video-sharing website at the time. In retrospect, it was an amazing deal that has proved to be one of the greatest acquisitions ever by a company.
Keep in mind that YouTube was relatively new in 2006. It was created in February 2005 by three former PayPal employees. While Google’s acquisition of YouTube seems like a no-brainer now, copyright infringement problems among other issues caused some people to question the deal. Billionaire and star of ABC’s Shark Tank, Mark Cuban, was one of the critics of the acquisition, calling it a crazy deal at the time.
Early Investors in YouTube
Sequoia Capital invested $9 million in YouTube as a venture capital investment in 2005 and 2006. As a result of the Google acquisition, they received approximately $500 million worth of Google stock, according to the Wall Street Journal.
Artis Capital Management invested $3 million in YouTube before it was acquired by Google. This investment turned into $85 million in Google stock because of the Google acquistion.
The three founders of YouTube certainly also became quite rich because of the acquisition. Chad Hurley received $334 million, Steve Chen obtained $301 million, and Jawed Karim got $66 million, all in Google stock.
How YouTube Makes Money?
YouTube primarily makes money through ads played on videos. Users upload videos to YouTube and have the option to show ads to earn revenue if they meet certain criteria. The user makes money from these ads when they play on the videos and YouTube (technically Alphabet) takes a cut of this ad revenue. In 2019, YouTube had $15,149,000,000 in advertising revenue.
Another primary source of revenue is subscriptions. This includes YouTube Premium and YouTube TV.
YouTube Premium allows for ad-free videos, background play, downloads, and premium music. At the time of this article, this service was $11.99 per month.
YouTube TV allows subscribers to watch local and premium TV channels such as CNN, Fox News, NFL Network, ESPN, and many other channels. It was $64.99 per month at the time of this article.
According to YouTube, over 2 billion users visit the website monthly. The watch time is over a billion hours per day, which is mostly on mobile devices.
Closing Thoughts
While YouTube is not directly a public company, you can invest in YouTube by buying shares of Alphabet (GOOG). In addition to owning YouTube and Google, Alphabet owns several other subsidiaries or businesses such as Fitbit, Nest, Jigsaw, Waymo, Verily, Calico, DeepMind, and more. It is a complex corporation that potential investors should put in extensive due diligence before considering an investment. Of course, an investment in Alphabet can result in losses. Seek professional financial advice, if needed, before investing in Alphabet.
