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Google Triples YouTube Ad Revenue, Thanks to Apple

Daniel Sparks
June 11, 2013

Editor's note: A previous version of this article misstated how much of Google's sales YouTube accounted for last quarter. The Fool regrets the error.

The YouTube app was gone. On Aug. 6, 2012, MacRumors was one of the first to notice that Google's (NASDAQ: GOOG) video-sharing app had been pulled from Apple's (NASDAQ: AAPL) iOS. This wasn't the first Google app to be ousted. Its sudden disappearance followed the banishment of Google Maps. This seemed to be the beginning of the end for Google on iOS.

Boy, were we wrong.

YouTube ads propel mind-boggling revenue growth
Ever wonder what kind of revenue YouTube earns on mobile devices? Well, there's no need to guess. Google's Lucas Watson, vice president of sales at YouTube, sat down with Bloomberg and shared some numbers. "The commercial business has exploded," he said. "It's a huge part of our business, and we know that's where it's headed." YouTube's ad revenue has tripled over the last six months, contributing revenue of $350 million to YouTube in that period.

What's driving growth? As Bloomberg reported, "'The recent growth in usage follows Apple (AAPL)'s decision last year to drop YouTube as a core application in the iOS software for iPhones and iPads,' said Phil Farhi, director of product management at YouTube." Shortly, after Google launched a native YouTube app for the iPhone that supported ads, unlike the previously stocked version. The new app flourished, indicating a cause-and-effect relationship between Apple's decision to drop the app and YouTube's increased success on mobile.

A small piece of a bigger puzzle
To the extent YouTube can thank Apple, no one knows. Nevertheless, YouTube mobile is undoubtedly firing on all cylinders. YouTube app use is up 42% from a year ago, according to Nielsen. 

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