YouTube advertising will boost Google by 2011

By Yinka Adegoke

NEW YORK, Oct 16 (Reuters) - YouTube will need at least two years to start making a meaningful contribution to parent Google Inc's (GOOG.O) revenue, despite a clutch of advertising initiatives this month aimed at cashing in on its online video dominance.

In the last eight days the popular video-sharing site has launched four new ad formats, signed its first full-length video pact and even taken its first dip into e-commerce.

Executives described most of the revenue-generating initiatives as experiments or beta tests, but analysts said the long-awaited moves will increase Google's revenue, though not in the near-term.

Google rakes in about $5 billion in quarterly revenue, mainly from Web search advertising. Though Google doesn't break out YouTube's revenue, analysts estimate it will make $200 million to $250 million -- a small percentage of the parent's revenue -- this year.

"In terms of making meaningful high single-digits

(percentage) revenue share that would be 2011," said Martin Pyykkonen, an analyst Wunderlich Securities.

Investors are increasingly voicing worries about when the San Bruno, California company, which Google paid $1.65 billion for in 2006, will start to deliver revenue and profits in line with the potential of its huge visitor numbers -- more than 330 million worldwide users in August alone.