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INTERNET sensation YouTube is set to rack up a £107million loss - and that's the best case scenario.
Despite millions of people logging on every day to check out the site's videos, San Francisco IT consultants RampRate said owners Google would take the massive hit.
That's far better than Credit Suisse's £288million estimate from April. But the bottom line is that Google are not making any cash out of YouTube.
The site cost them more than £1billion when they bought it off founders James Karim, Steve Chen and Chad Hurley in 2007.
And as long as they don't charge its users, they will struggle to make money from it.
Social media consultant Craig McGill said: "When the new iPhone came out, uploads to YouTube increased by 400 per cent which shows just how much of a demand there is for this kind of thing.
"There is no way Google are going to get rid of something that creates that kind of demand even if they haven't as yet worked out a way of making money from it.
"If Google thought that they could get away with charging even just 10p per upload then they would but they know internet users are so used to being able to do it for free that they would simply go elsewhere."
Google are expected to rake in £147million in advertising revenue from YouTube this year.
The site's current top 10 features a toddler biting his brother's finger, a motivational singer dancing and various pop videos. But its users don't stop to consider how much it costs to get those films online.
Google have to pay for data centres, hardware and software to deal with the 20 hours of video YouTube users upload every minute.
They also pay top rates for premium video content such as TVshows.
The costs are estimated to be up to £232million a year, although Google remain tightlipped about the actual figure.
Not that Google really have all that much to worry about, with their overall profits reaching £870million for the first quarter of this year.
In theory they could easily support a loss-making venture such as YouTube, the third most popular site on the internet.
And some digital economy experts reckon that YouTube is anything but a burden to Google.
Keith McMahon, senior analyst for the electronic business experts Telco 2.0 Initiative, said: "There are many urban myths surrounding the way that companies extract value from the internet.
Status "Google's spin-off benefits from owning YouTube include the accumulation of our data and strengthening of their network design.
"And the more time people spend watching online video, the more advertisers will pour into marketing on the internet as a whole.
"There's no doubt that Google can afford YouTube."
McMahon also believes that keeping schtum about YouTube's true financial status works in Google's favour when it comes to negotiating with copyright holders.
But while Google can cover losses, what hope is there for other internet start-ups looking to copy YouTube's free model?
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