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July 09, 2008
Will YouTube's drastic choice flop?

Google's quest to monetize YouTube may have hit something of a brick wall with the news that the company will now begin serving pre- and post-roll ads on its video network.

The decision, which comes several months after Google announced that finding a monetizing model for YouTube would be a top priority, is not without its controversy. While advertisers love the impact pre-roll often gives them, users have so far balked at the idea of watching a 30-second spot before a typically short viral video. Even Google's internal research showed that users abandoned video at higher rates when presented with pre-roll, according to Search Engine Land.

So why the reversal? In a word, it likely comes down to revenue. YouTube is expected to have revenue reach about $200 million this year, but for the dominant video destination, that's a far cry from the front of the pack, according to a TechCrunch report.

While YouTube's quest to enhance revenue isn't a surprise, its inability to innovate is. Serving ads before and after videos isn't a new idea. Although YouTube was unsuccessful with its overlays ads experiment last year, the company seems to have taken a step backward from a technology perspective. At the same time, VideoEgg, a rich media advertising network, has come out with five new video advertising methods, including functions that let advertisers link videos to their online stores or share maps to locations where users can purchase a product.  

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