“If YouTube were a country, we’d be the third largest in the world after China and India,” the video-sharing giant, owned by Google, said in a blog post.
“PSY and Madonna would have to repeat their Madison Square Garden performance in front of a packed house 200,000 more times.
“That’s a lot of Gangnam Style,” it added, referring to the South Korean rapper and American pop singer.
The YouTube team noted that nearly half of people using the internet visit the website.
The milestone marks another step in YouTube’s evolution from a quirky start-up launched in 2005 to one of the most influential forces in today’s media landscape.
YouTube crossed the 1bn threshold five months after Facebook said its online social network had reached that figure.
The vast audience has given YouTube’s owner, Google, another lucrative channel for selling online ads beyond its dominant internet search engine.
Google bought YouTube for $1.76bn in 2006 when the video site had an estimated 50m users worldwide.
Since late 2011, YouTube has refocused its site to prioritise watching along distinct channels of its creators.
Such channels were seen as better allowing advertisers to focus on certain genres of content like beauty or music.
In 2012, it seeded 96 channels with about $100m (€77m) in funding to help them accelerate that growth, often partnering big-name Hollywood producers and directors who had made it big in movies or TV but not on the internet, including CSI creator Anthony Zuiker. But this week’s event focused largely on those who had succeeded on YouTube before the channel-funding strategy was in place.
Robert Kyncl, vice president and global head of content partnerships, acknowledged that the strategy had not worked as well as hoped.
When asked if the investment had paid off, he said: “Every year, we reserve the right to get smarter.”
He said more of such investment in the future would go to channels that had proved they can build an audience on their own.
“What we’re looking for is the acceleration of those who are figuring out how to retail their content,” he said.
*Most viewed videos of all time on YouTube
1. PSY — ‘GANGNAM STYLE’: 1,451,647,465
2. Justin Bieber — ‘Baby’ featuring Ludacris: 841,681,329
3: Jennifer Lopez — ‘On The Floor’ ft. Pitbull: 658,525,199
4: Eminem — ‘Love The Way You Lie’ ft. Rihanna: 547,804,981
5: LMFAO — ‘Party Rock Anthem’ ft. Lauren Bennett, GoonRock: 528,034,751