Can you believe it’s been 20 years since the video-sharing platform YouTube was launched?
It all started with a simple idea from three ex-PayPal employees to make a website where ordinary people would share their “home videos.”
The idea quickly exploded.
Shortly after its limited launch in May 2005, the site drew some 30,000 visitors a day. By its official launch in December of that same year, it was serving more than 2 million views each day, according to Britannica.
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The platform was becoming popular at an extraordinary pace, and by the summer of 2006, it was serving more than 100 million videos a day.
Its huge success was noticed by the search engine giant Google Inc. (now Alphabet (GOOGL) ), which unsuccessfully tried something similar with its video service, Google Video.
Then, in November 2006, Google acquired YouTube for $1.65 billion in stock, and instead of merging websites, it continued YouTube’s operations separately.
Fast forward to May 2025. YouTube has more than 2.70 billion monthly active users, trailing only one platform — Facebook, which has 3.06 billion users.
Over the years, YouTube has made various updates and changes to its platforms. Some of them were welcomed, others were hated. The latest change, however, could frustrate a significant portion of viewers.
YouTube’s new approach to ads may impact the user experience.
Image source: Porzycki/NurPhoto via Getty Images
YouTube unveils new AI-powered ad format
During its Upfront presentation on May 14, YouTube presented a new ad format dubbed “Peak Points,” reported TechCrunch.
Peak Points relies on Google’s Gemini AI to analyze videos and find parts that have the highest viewer engagement or are most emotionally meaningful. You guessed it, ads will now be placed right after these special moments in the videos.
The goal is to capture viewers’ attention at peak engagement, using an emotion-based advertising strategy. This strategy is commonly used in the marketing world.
Basically, it focuses on the strong emotions users are experiencing at the time trying to either associate their brand with warm feelings or just foster better recall of the ads.
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What about viewers?
Imagine watching your favorite content and getting deeply immersed in it, and then right after the most enticing scene, such as a surprising twist, an ad pops up.
It’s something completely unrelated and unexpected, interrupting the joy of watching.
This could turn out to be a bummer for many viewers. Some may find it very irritating, and headlines like “Google wants to exploit your emotions with Gemini-powered ads” are already showing up.
The news may not be all bad, though, as the company also unveiled another ad format that some viewers might appreciate. It is a shoppable product feed enabling users to search and buy products during an ad.
YouTube lives off ads, and the revenue reflects that
While the new ad feature might frustrate many, it’s important to remember that YouTube’s revenue is highly dependent on ads.
In the first quarter of 2025, advertising sales revenue grew 10.3% year over year to $8.9 billion, marking the eighth consecutive quarter of double-digit-percentage growth. YouTube ad sales numbers do not include subscription revenue.
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YouTube operations helped drive a 12% overall revenue for its parent company Alphabet, reaching $90.23 billion, while net profit also grew 46% to $34.54 billion.
Over the past five years, Google’s stock price has grown by 139.84%, and it is currently trading at $164.66.
According to equity research company MoffettNathanson, YouTube is on track to surpass Disney in 2025 as the world’s biggest media company based on annual revenue, writes Stream TV Insider.
