Malcolm Gladwell's evisceration of Chris Anderson's new book got some attention awhile back. Among other free services, Gladwell targeted YouTube as an instance of free online content gone wrong. This YouTube myth-busting offers some counterpoints:
Myth 3: Traffic, growth, and uploads are bad for YouTube's bottom line. There's been a lot of speculation lately about how much it costs to run YouTube. With revenue estimates ranging from $120 million to $500 million, and costs on an equally large spectrum, it seems people can pick any number to fit any theory they have about our business. The truth is that all our infrastructure is built from scratch, which means models that use standard industry pricing are too high when it comes to bandwidth and similar costs. We are at a point where growth is definitely good for our bottom line, not bad.