This is largely correct, but not sure if it was a backscratch or just inevitable. I was in a streaming startup at the time and followed the Youtube saga. The

This is largely correct, but not sure if it was a backscratch or just inevitable. I was in a streaming startup at the time and followed the Youtube saga. The reported facts are: 1) Their VC partner would automatically just write a check when they ran out of storage to keep the growth going up and to the right. The founders also had very large credit card limits. 2) Bandwidth at the time was $1,000/Mbs at 95%. In other words, terrifyingly expensive for streaming. Rackmount servers were $5,000 and up, which is why Google was trying to use bare motherboards vertically. (Go to the Computer History Museum to see one of their early racks. The Fire Marshall banned them.) 3) It was just a matter of time before crushing lawsuits from the labels. Google ended up spending over $1 billion on legal fees alone after the purchase, and had to write their Content ID system. (That's what stopped me from even considering this.) 4) Google bought them because Youtube was way ahead on adoption and features compared to Google Video. The San Jose Mercury News had a 2-page(!) comparison of features. Youtube's page was full, and Google's was half full. It was stark. 5) The Youtube founders were in limbo for months after the purchase for Google to finalize it, even after joining Google. My guess is that is was related to understanding how bad the the looming lawsuits would be. Hats off to the Youtube founders for giving employees at least $1 million each despite the quick exit for most of them. Contrast that with Cobalt Networks, which sold to Sun for $2 billion and not a single IC made a dime.