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10/8/2008
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Google's YouTube: Finally, A Way To Make Money

The online video site has added e-commerce links to YouTube partner videos so viewers can purchase related products.

In an interview in August, Google CEO Eric Schmidt said his company still hadn't figured out how to implement advertising on YouTube.

Now it appears that Google has some money-making ideas after all. On Wednesday, YouTube said that it has started to include e-commerce links with YouTube partner videos so viewers can purchase related products. YouTube's partner program is for those who make quality videos with commercial prospects; a significant portion of YouTube videos are not what advertisers want to be associated with.

"Today, we're taking our first steps to providing YouTube users with this kind of instant gratification, by adding 'click-to-buy' links to the watch pages of thousands of YouTube partner videos," YouTube said on its Web site. "Click-to-buy links are non-obtrusive retail links, placed on the watch page beneath the video with the other community features."

So along with rating, sharing, and commenting on videos, YouTube users can now click on links to buy songs, books, and movies featured in online videos. For example, EMI's official video for Katy Perry's "I Kissed A Girl" now includes "Download this song" links to Amazon's MP3 Store and Apple's iTunes Store.

Presumably, YouTube gets paid a commission for the referral, but the company did not disclose any financial details.

The video-sharing site, however, did say that it expects to develop its e-commerce platform over time. "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, and generate additional revenue from their content on YouTube beyond the advertising we serve against their videos," the company said.

It's not immediately clear whether the addition of e-commerce links will generate a substantial amount of revenue for YouTube, given that most of site's videos are user-generated content rather than professionally produced videos with associated products. To date, no one has quite figured out how to make money off of cats playing the piano, apart from those selling online video startups that aggregate that sort of entertainment.

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