SAN BRUNO, CALIF. — Chad Hurley, co-founder of YouTube Inc., says he always gets the same question: "When are you guys going to make money?"
The answer he gave television executives at a broadcasting conference last month: "I don't think there's going to be a silver bullet."
That's why YouTube, Google Inc.'s enormously popular video-sharing site, keeps loading up on new advertising formats: It's trying to see what works.
At its headquarters here Wednesday, YouTube officially unveiled its latest effort: an auction-based advertising system, similar to the one Google pioneered, that promotes sponsored video clips alongside regular search-engine results on the website.
The move tries to take advantage of YouTube's new status as the No. 2 Web search provider. It recently passed Yahoo and now trails only its corporate parent, Google, in terms of searches conducted.
YouTube wants to emulate the success of Google, which became the first company to turn searches into huge profits. "What we're trying to do is bring the best parts of Google and the best parts of YouTube together," said Matthew Liu, product manager for the service, called YouTube Sponsored Videos.
Google bought YouTube for $1.7 billion two years ago and has been looking for ways ever since to capitalize on its popularity. With the economy in the grips of the deepest recession in a quarter of a century, the search giant needs some help restoring Wall Street's faith in its growth prospects.
Google's stock fell 7% to $291 on Wednesday, the first time it's fallen below $300 in more than three years.
YouTube's new sponsored video program allows advertisers to create ads and bid for placement alongside certain keywords, through a self-service website modeled after Google's AdWords system for search ads. YouTube says the approach, which is initially available only in the United States, levels the playing field by making the ads available to individuals and small businesses as well as major brands.
Zagg, a Salt Lake City-based company, was one of a small number of advertisers that tested the new format. Cameron Gibbs, its Internet marketing manager, said that YouTube helped promote the protective clear film Zagg makes for hand-held electronics and that the campaign was more effective than banner ads and even some search ads.
