- YouTube is an American online video-sharing platform headquartered in San Bruno, California, founded by three former PayPal employees— Chad Hurley, Steve Chen, and Jawed Karim – in February 2005. Google bought the site in November 2006 for US$1.65 billion, since which it operates as one of Google's subsidiaries.
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Feb 02, 2021 · Acquisition of YouTube by Google. Google bought YouTube in October 2006 for $1.65 billion. At the time, YouTube was still relatively small compared to what we see today. Google advertised the acquisition as “the next step in the evolution of the internet.” In May 2007, YouTube announced the YouTube Partner Program that enabled creators to make money from their videos.
- in The Beginning…
- YouTube Partners
- Presidential Debates
- Going Live
- Target Markets
- Where Are They Now?
Founded by former PayPal employees Chad Hurley, Steve Chen, and Jawed Karim, the YouTube domain was registered on February 15, 2005. But initial plans were more akin to the early vision for Facebook, vis-à-vis a dating site for rating people’s attractiveness. Indeed, YouTube was originally envisioned as a video version of HotOrNot, confirmed by this early version of the site as captured by the Internet Archive. “I was incredibly impressed with HotOrNot, because it was the first time that someone had designed a website where anyone could upload content that everyone else could view,” explained Karim, in a 2006 interview with Time. “That was a new concept because up until that point, it was always the people who owned the website who would provide the content.” The first uploaded video was from Karim himself on April 23, 2005, titled “Me at the Zoo.” And because of its notable status in history, it has notched up more than 30 million views, despite the fact that it’s 19 seconds of fai...
In May 2007, YouTube rolled out its Partner program, an initiative to help its most popular YouTubers (and YouTube) make money. This was a key moment in the evolution of YouTube, as it essentially gave some user-generated content (UGC) the same status as YouTube’s professional partners, such as CBS, and opened up revenue sharing and promotional opportunities to home video makers like Lonelygirl15.
YouTube and CNN teamed up in 2007 for a series of televised presidential debates, with candidates answering questions submitted by the public through YouTube. This was a landmark partnership, representing a major milestone for YouTube as a mainstream medium and the web as a bridge between the electorate and politicians.
After experimenting with various formats for some time, in late 2007, Google finally revealed how its new ads would look: They would constitute semi-transparent overlaysthat appeared across the lower fifth of a video. Google and YouTube’s ads have gotten more sophisticated in the intervening years, but this is when it all kicked off.
Though YouTube already offered some older full-length feature films for free, in January 2010, it entered the movie rental market, starting with just five flicks from indie filmmakers. That offering was later expanded, though it never quite took off in the way Netflix did.
In 2010, Google confirmed a deal to livestream the Indian Premier League cricket globally, for free, with the company claiming this as the first major sporting event to be streamed around the world. Later that year, Arcade Fire was beamed live from Madison Square Gardens, before YouTube went on to launch itsofficial livestreaming platform in April 2011.
Over the past 18 months, YouTube has embarked on a rigorous program of targeting (sizable) niche segments of the online video market. In February 2015, YouTube Kids launched with a focus on family-friendly entertainment, while six months later, YouTube Gaming was unveiled as a hub for watching other people play video games. Later that year, YouTube Music arrived on the scene, specifically to help music fans discover, well, music. In October 2015, YouTube launched YouTube Red, a $10 monthly service that ditched ads and served up offline access, along with other perks, including access to Google Play Music and original programming. Taking a global perspective, one of Google’s stated aims is to target the “next billion” internet users. And last week, the company announced a brand-new standalone YouTube appbuilt from the ground up for the Indian market, with offline access and granular settings that let users choose the video resolution. From new social hubs to moderator incentive schem...
Chad Hurley is said to have made around $400 million from selling his company to Google, and he served as YouTube CEO until 2010. After that, he and Steve Chen went on to found Avos Systems, an internet incubator of sorts that acquires startups (including Delicious) and builds products and companies. In 2013, Avos launched a video editing app called Mixbit, which would later become the Avos’ sole focus, as Hurley and Chen parted ways. Hurley’s other investments include basketball’s Golden State Warriors and soon-to-launch soccer club Los Angeles Football Club. Steve Chen reportedly made around $300 million from the sale, and he served as chief technology officer (CTO) at YouTube until his departuresome time in 2008, though he remained at Google after that. After Avos Systems spun out Mixbit in 2014, Chen joined Google Ventures. Jawed Karim was the least-known of the three YouTube cofounders, largely due to his role at the company. Though he was involved in drawing up the YouTube con...
Oct 09, 2006 · Google Inc. is snapping up YouTube Inc. for $1.65 billion in a deal that catapults the Internet search leader to a starring role in the online video revolution. Oct. 9, 2006, 8:54 AM PDT / Source...
- NBC Universal
Oct 09, 2006 · 1:25 PM PDT • October 9, 2006. Moments ago the deal was confirmed. In their largest acquisition to date, Google has acquired YouTube for $1.65 billion in an all stock transaction. Both companies ...
- Did The Acquisition Eliminate A Direct Competitor?
- Did It Improve The Company’S CORE Business?
- Was It A Smart Investment For The Future?
- Did It Prove Profitable?
- Did It Boost The Company’S Stock?
- Did It Benefit users?
- Are There Any Crazy Tech Acquisitions That Were Smarter?
It did. In 2005 the web was in desperate need of a video hub, and Google tried to create one with the poorly named Google Videos (a naming concept the company refuses to reinvent). But the site failed to catch on as quickly as YouTube, which had more social features and extremely popular pirated TV clips (try to find a 2006 feature about YouTube that doesn’t mention “Lazy Sunday”). At the time of its acquisition, YouTube was one of the world’s fastest-growing websites, and its executives had a clear understanding of what users wanted out of a video site. As the adage goes: If you can’t beat them, buy them.
Yes. Google cares about selling ads, and it especially cares about selling ads against search results. YouTube has evolved into the world’s biggest video search engine, with a sprawling database of clips made navigable by Google’s smart algorithms. Google can sell display and video ads against all these clips, to the tune of more than $5.2 billion in estimated revenue this year, according to eMarketer. It helps that search results from the main Google search engine are often filled with YouTube clips. Google loves when search queries drive people to other Google services, and YouTube is a big part of that strategy.
Definitely. In 2006, YouTube was basically America’s Funniest Online Videos + illegal SNL clips. Since then Google has made smart decisions to expand the site’s ambitions. Splitting ad revenue with video creators spurred the creation of higher-quality content. That content has been extremely popular among kids and young adults, whose clicks are the precious manna keeping thousands of media/tech/advertising professionals employed. And YouTube has aggressively reinvested its money into the formats of the future, such aslivestreaming and virtual reality. But while YouTube is the reigning king of online video, it hasn’t yet lived up to the cable-killer hype pundits have been ascribing to it for years. YouTube has tried investing in television-like original content, charging for channel subscriptions á la carte, and launching a Netflix-esque monthly subscription service with exclusives shows and movies. But it’s still viewed as television’s kid brother among its advertisers, and as a lau...
No … which works heavily against my argument, but hear me out. Google doesn’t break out YouTube financials, but according to a Wall Street Journal source, the video site was “roughly break-even” in 2014. Due to handing creators a majority of ad revenue, constantly upgrading its product, and managing nearly 20 percentof North America’s internet traffic, YouTube’s costs are sky-high. Online video is a complex, expensive business, and thanks to Facebook, it’s now a competitive one, too. But the heightened competition only makes YouTube a more important strategic asset for Google. In a world without YouTube (or with an independent but less powerful YouTube), Facebook might have been able to waltz into the video sector and take over, usurping Google as the leader in digital advertising. YouTube acts as a bulwark against younger tech companies that know Google could be toppled as internet use shifts from desktop to mobile and, soon, to living room devices. Every dollar YouTube makes is a...
Yes. Google’s stock climbed to an all-time highshortly after the YouTube acquisition in 2006, and it’s been part of the company’s growth narrative ever since. Wall Street continues to see big upside in the video platform. On Google parent company Alphabet’s last earnings call, five of the 12 stock analysts who asked questions inquired about YouTube’s business. As with many of Google’s more nascent projects, the company’s exact plans for the future of YouTube aren’t clear. But the simple fact that the company is investing in YouTube shows it cares about the future, which investors like. Couple that with a still-thriving search business and you have one of the best-performing stocks of the last decade.
Obviously. YouTube rid us of the scourge of buffering. It created a financial ecosystem that encouraged creatives to launch independent businesses, or at least get their 15 minutes. It let us stream almost any song we wanted for free. The site has at various times courted controversy with copyright holders, record labels, and even the video creators that give it value, but the end result for the lowly YouTube viewer has been a decade’s worth of free, fast online video. Here’s to a decade more.
There’s an argument to be made for Facebook’s $1 billion purchase of Instagram, which also eliminated a nascent competitor and is growing into a significant revenue source. But Instagram is a smaller platform than YouTube with a narrower focus. If Google never bought YouTube, the entire online video ecosystem would be fundamentally different in unpredictable ways. If Facebook never bought Instagram … Facebook’s stock would be lower, and Instagram would have fewer annoying updates begging users to follow their Facebook friends.
- Victor Luckerson