YouTube's Promoted Videos program hit a major milestone this month, hitting half a billion views. This figure certainly lends more credence to recent conjectures that the video-sharing site might, in fact, be starting to generate significant revenue (if not profits) for Google.

The Promoted Videos program launched two years ago, and, according to the YouTube blog, has seen a six-fold increase in viewers clicking on these creator-sponsored vids in the past year (advertisers basically pay to have these videos appear in search results, on the YouTube homepage and on video pages).

This increase in engagement makes sense, considering the service got a boost a year ago with the addition of AdSense ad units. Promoted Videos has also gained exposure by expanding beyond the U.S. and bundling with YouTube's Video Targeting tool. In addition, the site's Promoted Video API in AdWords is currently in beta, letting agencies use Promoted Videos to manage campaigns across multiple clients.

The profitability of YouTube has long been an issue — last year Credit Suisse projected that YouTube would generate only $240 million in revenue for 2009. With the report estimating YouTube's expenses at $711 million per year, that's a $471 million loss for Google.

Still, at the beginning of this year, Google CEO Eric Schmidt foresaw YouTube turning a profit in 2010, and a Wall Street analyst recently said that YouTube may be closing in on $1 billion in annual revenue. Add to that the fact that the company recently reported that it was monetizing 2 billion views per week, and it seems like things are looking up for YouTube's bottom line.

While it would take you, the viewer, 2,853 years to watch every one of YouTube's Promoted Videos, we're embedding the first-ever vid below for your enjoyment. We give you, “Penny Pranks” by Office Max.





