YouTube to Sell Music and Games

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Google is taking the first steps towards turning its popular online video sharing site YouTube into an ecommerce destination, beginning with embedding links pointing to music and video games alongside videos available on the service. Google says the “click-to-buy” links displayed with individual videos will related directly to the content; the first tie ins point to music available via iTunes and Amazon.com’s MP3 store, along with the recently-released video game Spore, and appear as “unobtrusive” items beneath a video alongside other community features.

“You often see comments from YouTube users asking about the name of the song and where they can download it,” YouTube’s Glenn Brown and Thai Tran wrote in the Google corporate blog. “This is just the beginning of building a broad, viable e-commerce platform for users and partners on YouTube. Our vision is to help partners across all industries—from music, to film, to print, to TV—offer useful and relevant products to a large, yet targeted audience.”

According to reports, Amazon and iTunes have revenue sharing agreements with YouTube when users buy content through links included in the partnership; although terms are not available, such revenue sharing arrangements have would be typical for Google.

Industry watchers have been wondering what moves Google would make to generate more revenue from YouTube: despite being one of the most-trafficked sites on the Web, Google has been slow to exploit all the eyeballs coming to the site to view video. Google bought YouTube for $1.65 billion in 2006, and has yet to generate significant revenue from the site—at least, in comparison to Google’s other operations. Google is also facing a $1 billion copyright infringement suit from Viacom.

YouTube has experimented with advertising formats—including test of pre-roll and in-video advertising—but comparatively few have “stuck” on the site, with a remarkable number of pages actually being ad-free.

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