Filed under: Google (GOOG), Marketing and advertising

About two years ago, Google (NASDAQ: GOOG) paid $1.65 billion for YouTube. The purchase is now starting to look like a poor decision.

According to The New York Post, “YouTube’s numbers for 2008 don’t look pretty: while 3 billion videos are viewed every month, revenues could total an anemic sub-$200 million this year.”

Some analysts believe that the trouble with YouTube is that the videos are too short, or that it is difficult for marketers to figure out in advance which content will pull well with users. Those views are wrong.

The basic trouble with YouTube is that that video quality of 99% of the content is terribly poor. Source material for many clips comes from home video cameras or cellphones. None of that is of “production value.” Putting ads that cost millions of dollars to create next to low-resolution content is a hard sell.

YouTube has a very basic problem. Most of its videos don’t look good and a lot of them are barely watchable.

Douglas A. McIntyre is an editor at 247wallst.com.

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