As of 9/7/16, a YouTube worth of $86.22 billion is based on an analysis of Google’s valuation, annual revenue and estimates from several online analysts. YouTube is owned by Google, whose parent company Alphabet Inc. doesn’t publish exact figures. That said, Alphabet Inc. is worth exactly $517.79 billion per 2016 data. YouTube makes up approximately 15.46% of Google or $77.67 billion. However, looking at numbers for YouTube’s revenue year over year gives a much higher valuation for YouTube of $104 billion. An analysis of online estimates from around the web places the worth of the video streaming service at a much lower $70 billion. Taking the average of these three figures gives us our $86.22 billion YouTube worth number. The sections and tables below break down the data into manageable chunks.
— YouTube (@YouTube) July 29, 2015
How Much is YouTube Worth? $86.22 Billion
The YouTube worth figure of $86.22 billion in the table below comes from a recent MoneyNation analysis. It’s an average of three other estimates: How much YouTube is worth based on revenue alone, how much it’s worth as a percentage of Google’s stock valuation and how much it’s worth based on an average of estimates from other online analysts. The three numbers all come in between $70 billion and $104 billion, weighted toward the lower end and resulting in the average figure of $86 billion.
How Much is YouTube Worth?
|YouTube worth based on analysis of revenue, stock valuation and online estimates)||$86,222,833,333|
|YouTube worth based on revenue||$104,000,000,000|
|YouTube worth based on Google stock valuation||$77,668,500,000|
|YouTube worth based on average of online estimates||$77,000,000,000|
YouTube Worth Based on 2006 Acquisition Cost: $104 Billion
The table below shows YouTube worth based on a mix of two factors: Google’s 2006 payment of $1.65 billion to buy the internet video giant and YouTube’s earnings year over year. The logic goes like this: a company that earns $100,000 per year might be expected to earn $1 million in ten years. That puts the value of the company at a rough $1 million. It’s a very rough rule of thumb but it gives a good ballpark picture of a company’s worth. In 2006, Google paid $1.65 billion for YouTube. That same year, YouTube earned about $15 million in revenue, according to an analysis of SEC filings. Many analysts were shocked that Google paid that much for YouTube, saying it was about ten times too much. That does seem to be a valid criticism of Google’s payout for the company, since it looks at first like YouTube was worth ten times its $15 million earnings at the time or $150 million. However, Google almost certainly wasn’t buying YouTube based on its current earnings but rather based on expectations of future earnings. In other words, it’s a fair bet that Google assumed YouTube could make over $165 million a year in revenue very soon. Were they right? According to the analysts, yes. The 2006 valuation of YouTube in the table below is simply the $1.65 billion Google shelled out for the company. All the other numbers are YouTube’s earnings for the year multiplied by ten. Following that progression out to 2016 gives us a rough YouTube worth of $104 billion, since the company is estimated to have earned $10.4 billion in that year.
YouTube Worth Based on Acquisition Cost in 2006
|YouTube worth 2006||$1,650,000,000|
|YouTube worth 2007||$1,500,000,000|
|YouTube worth 2008||$2,000,000,000|
|YouTube worth 2009||$5,885,000,000|
|YouTube worth 2010||$9,100,000,000|
|YouTube worth 2011||$16,000,000,000|
|YouTube worth 2012||$26,000,000,000|
|YouTube worth 2013||$41,000,000,000|
|YouTube worth 2014||$61,000,000,000|
|YouTube worth 2015||$82,000,000,000|
|YouTube worth 2016||$104,000,000,000|
— YouTube (@YouTube) July 18, 2016
The tweet above from YouTube showcases YouTubeMusic, one of the many ways the company continues to dominate online streaming media. YouTube has the #6 biggest Twitter channel.
YouTube Worth Based on Google Stock Valuation: $77.67 Billion
Attacking the YouTube worth question from another angle gives a lower figure of $77.67 billion. That’s the amount YouTube is worth if it’s looked at as a percentage of Google. Again, there’s no document anywhere that Google has released that says, “YouTube is exactly 15% of Google.” However, that’s about the size of things, based on info in the sections below. For now, it’s enough to know that Google is worth $517.79 billion and that YouTube makes up roughly 15% of Google. By that logic, YouTube’s worth in 2016 comes to $77.67 billion. To see where the 15% figure comes from, see the next section.
YouTube Worth Based on Google Stock Valuation
|Google Total Worth (market cap)||$517,790,000,000|
|YouTube as a Percentage of Google||15%|
|YouTube Worth 2016||$77,668,500,000|
YouTube as a Percentage of Google: 15.46%
To arrive at the YouTube worth figure in the section above, it was necessary to peg a number for how big YouTube is. In other words, how big of a slice of the Google pie does YouTube take up? The answer turns out to be 15.46%. Where does that come from? Look at the table below. The value of Google in early 2016 was $498 million. That’s not an estimate, it’s a real number that comes from Googles stock price times all the shares of outstanding stock the company has. In 2015 that number was a higher $527 billion and in 2014 it was a lower $365 billion. In 2014, most online estimates placed YouTube’s worth at $40 billion. That’s 11% of Google’s valuation in the same year. In 2015 YouTube’s worth was estimated at $70 billion. That’s 13% of Google. Finally, the average of the top ten online estimates in early 2016 put YouTube net worth at $77 billion. That’s 15.46% of Google’s valuation at the same time.
YouTube as a Percentage of Google
Pokémon Go away!
— YouTube Gaming (@YouTubeGaming) July 25, 2016
YouTube Worth Based on Average of Online Estimates: $77 Billion
Several online estimates put YouTube’s value at $40 billion in 2014 and $70 billion in 2015. That’s a 75% growth from one year to the next. Google’s valuation meanwhile grew by 44.38%, with most analysts calling for Google to grow another 25% by 2016. That hasn’t happened. In fact, Google’s valuation had dropped 5.5% by early 2016, as the table below shows, though it has rebounded some since then. If YouTube grew by 75% in the same year that Google grew by 44%, it follows that YouTube became a bigger percentage of Google. The reason that’s important is that it tells us when Google’s value fell by 5.5% the next year, it doesn’t at all mean that YouTube’s value fell in the same year. In fact, we conservatively estimate that the YouTube worth grew by 10% that year. Where’s our proof? As always, in the pudding. YouTube makes its money from ad revenue. YouTube watch time continues to grow by 50% per year. More conclusive still is that YouTube’s revenue grew by nearly 27% from 2015 to 2016.
YouTube Worth Based on Google Worth
YouTube Revenue By Year
The YouTube revenue data in the table below comes from a mix of online sources including Forbes, Merrill Lynch Global Research and other online analysts. YouTube’s revenue in 2006 was just $15 million a year. That’s the year Google bought the company for $1.65 billion, which at the time was considered much, much too high. Google continued to draw criticism for the move for the next couple of years as YouTube’s earnings struggled to justify the money poured into it. Even when revenue grew by 900% by the end of 2007, many still complained that YouTube wasn’t turning a profit. Hindsight being as clear as it is, the move now looks brilliant. Google had the vision to see that YouTube wasn’t worth just what it was earning. It was worth what it was going to earn. Those numbers have seen growth of 26% to 194% every year.
YouTube Revenue by Year
|Year||YouTube Revenue||Percent Growth|
Google Worth: $517 Billion
Google is worth $517 billion if we just look at how much money all the company’s stock is currently worth. A stock price of $740 per share times roughly 700 million shares of total stock gives us that number. The table below shows how that number has changed over time. One key takeaway is that the consistent rise in the value of Google is thanks in no small part to its acquisition and continual growth of YouTube. The bigger and bigger YouTube worth numbers have contributed directly to the growth of Google and its parent company Alphabet, Inc.
Alphabet Inc. Worth