The number of bugs in a chip is relatively proportional to the number of transistors - Bob Colwell, former Intel chief architect
INTERNET MEDIA OUTFIT AOL has deferred to Google's Youtube service when it comes to making money on streaming videos from its many online media outlets.
AOL is desperately trying to reinvent itself as an online publisher by buying high-profile websites such as Huffington Post, Techcrunch and Engadget. However the firm had to rope in Google's Youtube service when it wanted to monetise its video feeds, showing just how far behind the game AOL is when it comes to making money from web content.
Google's Youtube service, which one would think is a rival to AOL's online moneymaking ventures, will run 22 channels containing 20,000 videos. According to AOL it will still sell adverts, but given that Google is likely to be taking a cut for doing very little, it seems highly embarrassing that AOL, which is still a very large internet service provider, can't make use of its own internet infrastructure and content hosting to generate the advertising revenue it so desperately needs.
Ran Harnevo, senior VP of video at AOL tried to justify his firm's move to Youtube by saying that publishers such as Hearst and Reuters also used Google's service to stream video content. While Harnevo is right in pointing to those companies, the difference is that those publishing firms traditionally haven't relied on the internet to make money and certainly lack the internet infrastructure to stream gigabytes of video every second.
That AOL needs Google's help to generate cash shows just how far the firm has fallen in the last decade, with Google effectively making money by leasing out its infrastructure and sysadmin staff. µ