Google Inc. is hitting a wall when it comes to selling advertising on YouTube, as corporate advertisers aren't keen to give the video-sharing site the ad revenue boost Google had hoped for, The Wall Street Journal reported Wednesday.

Although YouTube's users view videos more than a billion times almost each day, the site's global ad revenue is expected to be at about US$200 million for 2008, the newspaper reported, citing “two people familiar with the matter.”

Google bought YouTube in 2006 for more than $1.7 billion, when the site's revenue was at just $15 million, and had hoped the site would grow ad revenue, attracting traditional television advertisers, along with others. However, ad revenue growth has not been as quick as the online giant had hoped, and Google is looking to sell more video and display advertising on YouTube, as well as getting into TV, newspaper and radio advertising markets. “Its target: the 90 percent of global ad dollars that don't currently flow to the Internet,” The Wall Street Journal reported.

Moreover, nervous about alienating its massive audience, YouTube has even shied away from the briefest of pre-rolls, paidContent reported. Last year it launched overlay ads, which had not been widely implemented.

According to the The Wall Street Journal, YouTube now will adopt pre- and post-rolls.

In terms of context, YouTube charges at least $175,000 for one-day homepage sponsorship.

Sean Muzzy, media director at digital ad agency New@Ogilvy, told The Wall Street Journal that big advertisers aren't comfortable with their ads appearing along with amateur videos, and most are “still testing the waters on YouTube.”

Eric Schmidt, Google's chief executive officer, has also admitted that YouTube has not yet discovered the best video ad formats.

In addition, about 105 problems were discovered by Tim Armstrong, head of advertising and commerce in North America, and included things like an inefficient sales system, in which some advertisers had to deal with three legal contracts.

To untangle the mess behind YouTube and Google, the search giant has created “Project Spaghetti,” which is fixing internal problems and inefficiencies, such as the legal contracts glitch. Armstrong said it hopes to complete the project by the end of the third quarter, but it will take Google about five to 10 years reach its advertising goals, according to The Wall Street Journal article, posted by Media InfoCenter.