From the Wall Street Journal:
YouTube Inc. is expanding the type of advertisements it sells to include videos on its home page and on special advertiser-created pages, shedding further light on how the hugely popular video-sharing site plans to make money.
Warner Music Group Corp.'s Warner Bros. Records will be the first to roll out the special advertiser pages with a video promotion for hotel heiress Paris Hilton's music album to be released today. In a twist, Fox Broadcasting Co. -- a unit of Time Warner competitor News Corp. -- will pay to advertise its "Prison Break" TV series on the Paris Hilton advertising page, and YouTube will share that ad revenue with Warner Bros.
YouTube, a closely held company in San Mateo, Calif., says its users watch videos more than 100 million times each day, making the site a leader in the fast-growing online-video arena. The year-and-a-half-old company has to date carried display and text advertisements it sold itself or brokered by third parties.
But YouTube executives have said they aim to create a system that pioneers new ad formats and which could be extended to broker ads for other Web publishers, much as Google Inc. brokers ads that appear on other sites today.
YouTube's strategy "revolves around the idea of having brand advertisers participate and become part of our community," says Chief Executive Chad Hurley.
The site will now allow advertisers to pay to have their videos displayed prominently on YouTube's home page, charging based on the number of users regardless of whether the consumers actually watch the videos. A user needs to click on the advertising video before it plays.