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This is now probably the gazillionth time I've used this old data point, but Amazon was in the hole for 6 years before they even turned out a profit, often losi

This is now probably the gazillionth time I've used this old data point, but Amazon was in the hole for 6 years before they even turned out a profit, often losing hundreds of millions in a quarter alone. The "strategic expansion" can also be spun as "category killer" management. What large business in their right mind would try to compete with YouTube at this point? VCs would scoff at anyone wanting to do a video-sharing startup now. It's a loss leader in the way Bing is to Microsoft or Cyber Monday is to Amazon: It grabs eyeballs. Case in point, Susan Boyle's debut album was not heavily marketed in the US; and her performances were originally broadcast only in the UK but made famous through YouTube. The album went on to sell more than 6 million copies worldwide. That is reach and marketing (even when it's unintended). YouTube now strikes _actual_ marketing deals for its front page, and has actively stepped up inserted ads in a huge way this year. And, they've been very close to profitability this year. All in good time, I suppose.

gamble 16y ago
Dozens of other companies followed Amazon's strategy and went bankrupt. Plus Amazon had an easy way to monetize traffic. Traffic alone isn't worth anything unless you can wring more money out of your visitors than it costs to service their requests. Google's existing advertising business works despite the low value of traffic because Google is collecting their cut from a huge swath of the Internet, and because the one kind of traffic they own - search - is the most directly linked to actually buying things, and thus the most valuable. Youtube is almost the opposite - expensive to service and totally unrelated to monetizable actions.