MUMBAI: When Google bought online video service YouTube for $1.6 billion six years ago some eyeballs were raised about whether the move was smart or made sense.

While it took the search giant a while to figure out the revenue model things are now moving full steam ahead. In fact the progress has been so good that Morgan Stanley has said that YouTube can make $20 billion in revenue and operating income of $5 billion in 2020.

YouTube will make $4 billion in gross revenue and $711 million in operating income this year.

The interesting thing is that YouTube is not just relying on advertising. It has started a paid subscription service for some channels. The aim is to allow for more interaction between content creators and consumers. Channels that have availed of this service include Acorn TV, Jim Henson Family TV and UFC Select.