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Company Background
It took only 24 months, as of January 2007, to rise from an idea in a garage to be acquired by a $1.65 billion dollar web penthouse — Google. It took 3 passionate people, Chad Hurley (CEO), Steven Chen (CTO) and Jawed Karim to create an interesting idea, believe in it and share it with the world. YouTube is a free service where anyone can create a video, share it, and users can give and receive feedback on it. In only 3 months from registering the YouTube domain name in February 2005, the company received $3.5 million in venture capital from Sequoia. YouTube runs independently from Google to maintain the brand that it has created. However, today in collaboration with Google, YouTube has gone a step further acknowledging their growth and increasing the value of their service by giving value to their users. That value will come from revenue sharing. Jeff Jarvis of Buzz Machine shares his video about You Tubes’ future here:
Strategic PhilosophyThe strategic philosophy for YouTube today is to give people a way to share their experiences through video. A simple concept which will allow people to have complete freedom of speech and creativity.
Mission:
The mission of YouTube is to build a community of motivated people to create and watch and share videos. I think the key word in this statement is motivated people, as without people motivated to be creative then it wouldn’t work. Now, instead of people sitting on the couch and watching regular television, people are sitting in front of their laptops along w/ a tripod & a camcorder creating their own.
Vision:
Now in conjunction with Google, the vision of YouTube may have changed from creating a best platform for users to share their experiences to one of providing users an opportunity to create quality experiences. Creating quality experiences is something that can not only be marketable but sellable. Additionally, it’s a win-win for YouTube as well as the user because the goal for any user is to get as many views as possible. And if a user was given an incentive then potentially the quality of the creative will increase and allow for better viewing experiences for all.
The Service:
The greatest aspect of YouTube is its scaleable functionality. Users can pretty much share their video anywhere; on another website, their blog, in an email. Not only that, every user has their own personal site & can be their own video director! Even today, people have become successful and an online celebrity through their own personal creativity. Perfect example is AskaNinja seen here below.
Existing Competitors:
Current competitors in the video-sharing category include Revver, Brightcove, Metacafe, Blip.t.v and many more. As people have been early adopters of YouTube, now with YouTubes’ future opportunity of its users to gain an income, and the ease of use of the service, other companies can quickly loose market share and their user base that have also taken on the revenue-sharing model.
Finance
It’s been reported that it costs $1 million per month in bandwidth costs to run the site. However, their revenue model is based on ad sponsorships which are definitely perfect for this type of medium. The company services 100 million videos per day, and advertising revenue is definitely in the $100’s of millions. Now, with Googles backing, connections and ad-platform, the two together can build an ad platform powerhouse. Operations: Being acquired by Google set a foundation for other start-ups. YouTube will definitely have the opportunity to continually be successful, especially now that they have made a mark and will soon provide revenue sharing. Other negative issues include copyright & lawsuits with not only the music labels but also Hollywood. The size of their user base will hinder the company in getting legal issues solved quickly. Overall, it is a great service and won’t be stopped especially given their platform & scalability.
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