This summer gave us a lot of speculation about the actual cost of running YouTube. Now the video site serves up nearly 100 billion videos a year, making some analysts wonder where all the bandwidth money is coming from. As Arbor Networks, a net flow monitoring hardware provider, has it, there is no money changing hands. Google’s YouTube is being run on the good ol’ barter system.
“I think Google’s transit costs are close to zero,” says Craig Labovitz, Arbor Network’s chief scientist. Google also said earlier in the year that standard pricing models just don’t apply for YouTube. Google has bought up a bunch of unused fiber-optics known as dark fiber through which it sends data to other networks. Those ISPs then trade traffic with Google. It’s a system I’ll admit I don’t completely understand, but when you think about the sheer amount of traffic Google generates, it seems logical they could trade some of their own fiber-optic space for a little bandwidth here and there.
As my source article at Wired points out, this is a fundamental shift in the way the net is carried. It used to be run by smaller ISPs, paying into larger ISPs, paying into intercontinental networks. But when Google sends 10% of all internet traffic around the web, it’s bound to find new ways to compensate the bandwidth providers, which is exactly what the company has done for YouTube.
The Wired article is a great read, and full of some cool information for anyone curious about the Net’s structure and where things are headed.
Wolfram Alpha just released an iPhone app that differs in one major way from the web engine – it costs $50. And the WA guys think people will buy it, though they aren’t sure how many.
