6 ms·

Let’s all laugh at my horrible 2006 post: “YouTube is not a real business”

121 points by doppp 12y ago

ChuckMcM 12y ago
Interesting, he wasn't wrong. And while Youtube is something of a 'fixture' today we had Google telling us it still wasn't making any money (although it had reached a point where it wasn't losing money either). Youtube was birthed by business worlds version of Ceasarian Section, basically Google funded the crap out of it invested in datacenters and putting Youtube "pods" in bunches of Colocation facilities around the world etc for a property that doesn't make any money. But what is next for the video service? What business model works where it makes back its money? Does it try to be NetFlix? HBO Go? Comcast? Does Google start throwing money at "Youtube Studios" to bring original (and with decent production values) content to the web? That is way outside their current comfort zone. How do they get people to watch and act on advertising they see on Youtube? Because unless they can do that it has to be subcription, and how do you turn the service that everyone knows is "free" into a subscription service? That is why I don't think it was wrong in 2006 or in 2015 to wonder if YouTube is a "real" business, I don't think we know yet.
- cma 12y ago
  >Google funded the crap out of it invested in datacenters and putting Youtube "pods" in bunches of Colocation facilities around the world etc for a property that doesn't make any money. When Google says YouTube doesn't make any money, they mean net of funding the crap out of it.
ddorian43 12y ago
Is youtube profitable ? If search-engine-ad-$ go puff, does it stay up or go down ?
- Htsthbjig 12y ago
  "Is youtube profitable?" Oh yeah, very, it is eating traditional TV alive. In Europe Governments want to intervene because it is taking so much money from their tv companies, and sending good jobs and money abroad. "If search-engine-ad-$ go puff, does it stay up or go down?" And if a meteorite crashes in the Earth?, or a big megaexplossion on the Universe sends cosmic rays to the planet? If nothing like this happens, there will be markets that grow, like TV from the Internet, and markets that recess, like traditional TVs. Early adopters use to benefit from growth in their markets.
  - jussij 12y ago
    > In Europe Governments want to intervene because it is taking so much money from their tv companies The European Government is planning to intervene, to stop Google putting paid adds into the search results, masquerading those adds as search results. They also are claiming Google is fudging the actual search results by moving non add-paying competitors to the lower pages of the search.
    - KaiserPro 12y ago
      I would go to say that youtube is a sideline: http://www.wired.com/2015/04/eu-google/ http://www.wired.com/2015/04/eu-google/ its a medium to dump adverts on.
  - bsder 12y ago
    > "Is youtube profitable?" Oh yeah, very, it is eating traditional TV alive. Eating/destroying does not imply profitable. Look at streaming vs. the music industry, for example. I would argue that all the changes that Google has been making to YouTube show that it, in fact, isn't particularly profitable.
  - KaiserPro 12y ago
    Nope, its not profitable. Infact, like the sun its dilated the advertising dollar, which means not only traditional TV mediums are loosing viewers to, they are loosing value per advertising minute sold. Its also not eating traditional TV. You don't sit down to watch a series on youtube. There is no such thing as longform youtube. There are no profitable 30minute episodic videos on youtube that aren't pirated. Content is king, and if you are producing shit content (cough 90% of the US TV market) saturated with adverts and repetition, users don't turn to youtube, they turn to netflix. Netflix will eat all, Youtube is, and unless something changes (like no user uploads) will always be a subsidised media charity store. Yes, its cornered the MTV music video and nutshot compilation market. It has enabled niche video makers for things like hobbies and such. but there is literally no money in that either.
    - DanBC 12y ago
- jedrek 12y ago
  Is television profitable if TV ad $ goes puff? No.
  - flippant 12y ago
    Cable television would remain unaffected.
  - ddorian43 12y ago
    Reread my sentence. I didn't say 'youtube ads $' I said, 'google search-engine ad $'. In another form, if youtube is separated from google, is it profitable ? Can it?
JacobAldridge 12y ago
Nice mea culpa, and a day after the "101 random and mutually exclusive ways we wanted to fix Apple in 1997". No doubt obervers, critics, and expert opinions have their place. But never underestimate the man in the arena - especially if you are the man or woman in the arena.
mhomde 12y ago
Everyone is right, sooner or later
mg1982 12y ago
He says Google got 100x their investment since it's 'worth' that multiple of what they paid. I don't think it's a valid argument since they paid real cash and have only a notional value in return. It's hard to see anyone forking over $100bn+ for youtube, and I doubt it's even made enough profit since they bought it to cover what they paid originally paid. None of this is to particularly criticise either the original post or its followup - it takes courage to call it as you see it and then own up to your mistakes, but it's always worth taking another pass at the figures to see if they really stack up.
bachback 12y ago
Very interesting. There is a very good interview with Chad about the wild ride: https://www.youtube.com/watch?v=l56Hw5H-DEI https://www.youtube.com/watch?v=l56Hw5H-DEI He talks quite a bit about their situation then. Not many startups go from 0$ to 1.65B$ in 22 months. Jason did not mention that Google itself was not a real business for a very long time. Are there good writeups of how Google managed to crack the biggest jackpot in business history with AdSense? Sure this experience taught them the lesson which they applied here. In poker terms it's like a draw to the nuts.
- jasode 12y ago
  >...of how Google managed to crack the biggest jackpot in business history with AdSense? To clarify, it was AdWords, not AdSense. AdWords (2000) was the original monetization strategy and is still the #1 contributor to revenue and profits today. AdSense (2003) came later. It's easy to get AdWords and AdSense mixed up because both brandnames are nondescriptive. Both AdWords & AdSense are based on "keywords" and both "senses" or "tries to make sense of" page content to generate relevant ad links.
- devonkim 12y ago
  IIRC, Google bought AdSense from a kid, and when integrated with their search it finally took off monetarily. Note that AdWords != AdSense either. I've got to admit that most acquisitions I've seen hardly result in an actual revenue increase all that quickly. At least Google is a mixed bag when it acquires as opposed to many others that pretty much as a rule have acquisitions that barely replace the value lost in other lines of business.
pja 12y ago
It wasn’t just the lawsuits - IIRC YouTube the business was also bleeding money at a terrifying rate thanks to infrastructure costs (servers, bandwidth) even without the legal problems. When Google took them on they were able to cut their costs to the bone by using capacity on Google’s internal fibre network which had been bought up cheap after the first dotcom crash & moving the data over to Google’s server infrastructure. Could anyone else have bought YouTube & managed to turn the business around apart from Google? It seems to me that YouTube was one of those businesses that had negative worth to all except a very few buyers. Did anyone else have the infrastructure knowledge to do what Google was able to do at the time?
- higherpurpose 12y ago
  It's interesting to look back from a historical point of view and realize that Youtube would've probably been closed down eventually just like Grooveshark, had Google not bought it and put its very best lawyers on the case. Now look what Youtube has become. Can anyone imagine the world now without Youtube or a Youtube-like service? Who knows what the world could've been if Grooveshark was also acquired by a big company and won its lawsuits. Maybe it would've turned into a major free audio-book platform, or a major podcast platform, or a major indie music artist platform (like how many new artists became popular on Youtube first). The studios really are innovation killers in their quest to only be paid through the old business models. They only change when they have no choice but to accept the change (like when losing lawsuits against certain companies which they try to shut down). Then they act as if they encouraged that sort of innovation in the first place when they testify in Congress for new copyright laws. Anyone still remember Turntable.fm? Yeah, they killed that one, too, and I remember it was seen as a highly innovative service.
  - KaiserPro 12y ago
    The problem is that small producers loose out. Unless you are very lucky, its almost impossible to make money. Worse still Google are pernicious in their licensing deals. I would postulate that Google is actually worse for small producers than your traditional record company. At least you could change record company and still distribute material. If you upload to youtube, you loose exclusive licensing rights. worse still because they own the platform as well, you have no choice but to upload to youtube.
anthony_franco 12y ago
Very few people know this, but I remember when MySpace almost killed YouTube. Yes, MySpace. YouTube blew up in popularity when everyone was adding videos to their MySpace profiles. And suddenly one day MySpace decided to block all YouTube embeds (they'd occasionally do this with other services as well.) At the time YouTube was just a small startup without much muscle behind it. All they could do is write a blog post pleading their users to contact MySpace to allow their videos. And it worked, a week later MySpace lifted the ban and it allowed YouTube to reach astronomical growth. Edit: Here's a link to the blog post mentioned https://web.archive.org/web/20051223152529/http://youtube.com/blog https://web.archive.org/web/20051223152529/http://youtube.co...
- ceeK 12y ago
  It's nice to hear of things like this. It's refreshing to remember that even the most successful startups had to go through make or break moments, and that it wasn't all smooth sailing.
- hippich 12y ago
  lucky youtube, since myspace totally could instead "import" videos when detecting embed.
  - pjc50 12y ago
    What do you mean? Bulk copyright infringement?
    - dublinben 12y ago
      As if any of the content on Youtube at that time was licensed? They owe all of their early success to "bulk copyright infringement."
- fzn 12y ago
  https://www.youtube.com/profile?user=justinrotnluk https://www.youtube.com/profile?user=justinrotnluk Funny to notice the profile was suspended... Twists. Edit: that user was especially thanked by YouTube on the latter IA blog post.
fx85ms 12y ago
> “we’re sorry that’s not our problem — we’re a platform” approach. An approach that is now the standard for disruptive startups. I truly agree with this on the "disruptive startups" part. Pretty nifty way to avoid all sort of legal troubles, don't you think?
- icebraining 12y ago
  Not particularly "nifty", it's the standard way for centuries. You don't get to sue the Postal Service if someone sends an unlicensed copy of your work through it.
  - deleted 12y ago
    [deleted]
deleted 12y ago
[deleted]
amelius 12y ago
Well, I think any experienced programmer could write a reasonable approximation to youtube in a weekend in their basement. So from that point of view, youtube is not really a business. However, as a "brand", it is of course quite strong. It seems to me that we have to come to the sad conclusion that building a business is more and more about building brands and locking in customers (into your ecosystem/social network), and less and less about the actual technology, which is ubiquitous after all.
- bsenftner 12y ago
  I think any experienced programmer knows that in a weekend you've barely begun to understand the problem you're trying to solve.
- ajdlinux 12y ago
  An experienced programmer can cobble together a moderately buggy, YouTube-esque site which kind-of-works for whatever video formats that can be converted by their local ffmpeg install, and allows a basic commenting system and upvotes/downvotes, running on a handful of servers capable of storing a few terabytes of data. YouTube, on the other hand, stores so much video that they can't actually tell you how much storage they have online at any one time. They have to process 300 hours of newly-uploaded video per minute, which they then have to serve up to millions of simultaneous visitors through a network of data centres with many thousands of servers spread around the world. On top of this, they have to deal with analytics, advertising, account management, copyright compliance, and everything else they have to do, on the huge scale on which they operate. That's not a minor technical achievement.
  - jacquesm 12y ago
    Youtube did not start with the tech infrastructure they have today. They started with that moderately buggy site which kind of worked for those formats that their local ffmpeg could handle without comments and votes and could maybe store a few terabytes of data. Don't look at the situation today (or even 3 months post launch) to see what a youtube like MVP could look like.
kazinator 12y ago
Meta dupe chain! https://news.ycombinator.com/item?id=9437641 https://news.ycombinator.com/item?id=9437641 It's a HN submission about a blog post, and that blog post is is about (a reaction to) the previous submission, which is about a previous blog post by the same blogger.
deleted 12y ago
[deleted]
logicallee 12y ago
>At the time I wrote that post, YouTube was not a real business; [...] The fact that they were forced to sell a business that is now worth $100-150b for $1.6b is a good indication for how close to the brink of destruction they were. I don't follow this point. How is selling something to Google for $1.6b an indication of being on the brink of destruction? And if the point here is that they were worth a discounted $100b then (so sold undervalued), how can that be the brink of destruction either? Either way I don't follow the author's reasoning here. It sounds like he's saying, "they were REALLY worth a discounted ~$100b, but they were in such dire straits they had to sell for 1.6% of that." But that contradicts his point that it wasn't a 'real' business. So either way, I don't see how that sentence supports the point he is making.
- adventured 12y ago
  Not to mention he missed by a mile on the valuation estimate. YouTube isn't worth anywhere near $100b-$150b. Netflix has a better business model, a track-record of profitability, more revenue and nearly 60 million paying subscribers. It's worth $33 billion by comparison (and is itself carrying a hyper valuation at 100-200 times earnings typically). Netflix is the general ceiling on YouTube's valuation.
  - logicallee 12y ago
    Yes, I agree and had an objection to that number in my first edit. It's obvious that YouTube isn't worth anywhere near $100B. What made me remove it is that Google itself is valued at 371B, so the idea that YouTube constitutes 26% of that valuation is something in the realm of what someone could defend. (To compare with your numbers, YouTube.com is the third-most visited site on the planet, after Google.com and Facebook.com [1][2] and has "more than 1 billion users" [3] along with 50% monthly growth according to that page. Since YouTube isn't in the same business as Netflix (VOD), it's hard to use that as a cap on its valuation.) The author's valuation of YouTube today is probably still inflated by a large multiple. You suggest a cap on YouTube of 8.9% of Google's valuation ($33B), perhaps that's fair, but it's hard to say as it's not an independent business. [1] http://www.alexa.com/topsites http://www.alexa.com/topsites [2] http://en.wikipedia.org/wiki/List_of_most_popular_websites http://en.wikipedia.org/wiki/List_of_most_popular_websites [3] https://www.youtube.com/yt/press/statistics.html https://www.youtube.com/yt/press/statistics.html
jroseattle 12y ago
I think Jason is overstating Google's risk acceptance with the Youtube acquisition. "Napster, Kazaa, and countless other media sharing services had been absolutely crushed..." did not happen by being out-litigated. They were over-litigated -- they simply didn't have the capital resources to commit to the legal challenges ahead of them. Google didn't have that problem. Google was also the darling of Wall Street, Sili Valley, tech culture, etc. which translated to a built-in victory in the court of public opinion. There was certainly legal risk involved, but they had a much more level playing field with the content producers.
- nolok 12y ago
  Actually the two named example given, Napster and Kazaa, where out-litigated. See http://en.wikipedia.org/wiki/Napster http://en.wikipedia.org/wiki/Napster > Initially Napster lost the case in the District Court but then appealed to the U.S. Court of Appeals for the Ninth Circuit. Although it was clear that Napster could potentially have commercially significant non-infringing uses, the Ninth Circuit upheld the District Court's decision. Immediately after, the District Court commanded Napster to keep track of the activities of its network and to restrict access to infringing material when informed of that material's location. Napster wasn't able to comply and thus had to close down its service in July 2001 And http://en.wikipedia.org/wiki/Kazaa http://en.wikipedia.org/wiki/Kazaa (not quoting a particular paragraph in this one as the "lawsuit" section is very long covering several countries, but it basically turns to "kazaa lost, started settling with all plaintiffs and agreed to turn into yet another legal music selling service clone").
  - jroseattle 12y ago
    Napster filed for bankruptcy in 2001 and blamed their "enormous legal fees" as the primary cause. (Outside of, you know, having any actual revenue.) Kazaa was in the same boat. It's true, they did participate in some lawsuits, but they were going to be overwhelmed by the sheer volume of legal activity (the very purpose of which was to drain them of resources.) Appeals, filings in multiple districts, etc. Back to Google/Youtube -- Google had the resources to sustain any sort of legal onslaught by the RIAA. In fact, more so as those companies started to see their profits decline steadily during the mid 2000s, and the prospect of winning a protracted legal battle wasn't so certain. As a bully, it's much easier to take the little kids' lunch money, but not so much fun when you encounter a much bigger kid on the playground.
skue 12y ago
> The fact that they were forced to sell a business that is now worth $100-150b for $1.6b is a good indication for how close to the brink of destruction they were. As a founder, I dream of having a company that close to the brink of destruction.

121 points by doppp 12y ago

Interesting, he wasn't wrong. And while Youtube is something of a 'fixture' today we had Google telling us it still wasn't making any money (although it had reached a point where it wasn't losing money either). Youtube was birthed by business worlds version of Ceasarian Section, basically Google funded the crap out of it invested in datacenters and putting Youtube "pods" in bunches of Colocation facilities around the world etc for a property that doesn't make any money. But what is next for the video service? What business model works where it makes back its money? Does it try to be NetFlix? HBO Go? Comcast? Does Google start throwing money at "Youtube Studios" to bring original (and with decent production values) content to the web? That is way outside their current comfort zone. How do they get people to watch and act on advertising they see on Youtube? Because unless they can do that it has to be subcription, and how do you turn the service that everyone knows is "free" into a subscription service? That is why I don't think it was wrong in 2006 or in 2015 to wonder if YouTube is a "real" business, I don't think we know yet.

cma 12y ago
>Google funded the crap out of it invested in datacenters and putting Youtube "pods" in bunches of Colocation facilities around the world etc for a property that doesn't make any money. When Google says YouTube doesn't make any money, they mean net of funding the crap out of it.

ddorian43 12y ago

Is youtube profitable ? If search-engine-ad-$ go puff, does it stay up or go down ?

Htsthbjig 12y ago
"Is youtube profitable?" Oh yeah, very, it is eating traditional TV alive. In Europe Governments want to intervene because it is taking so much money from their tv companies, and sending good jobs and money abroad. "If search-engine-ad-$ go puff, does it stay up or go down?" And if a meteorite crashes in the Earth?, or a big megaexplossion on the Universe sends cosmic rays to the planet? If nothing like this happens, there will be markets that grow, like TV from the Internet, and markets that recess, like traditional TVs. Early adopters use to benefit from growth in their markets.
- jussij 12y ago
  > In Europe Governments want to intervene because it is taking so much money from their tv companies The European Government is planning to intervene, to stop Google putting paid adds into the search results, masquerading those adds as search results. They also are claiming Google is fudging the actual search results by moving non add-paying competitors to the lower pages of the search.
  - KaiserPro 12y ago
    I would go to say that youtube is a sideline: http://www.wired.com/2015/04/eu-google/ http://www.wired.com/2015/04/eu-google/ its a medium to dump adverts on.
- bsder 12y ago
  > "Is youtube profitable?" Oh yeah, very, it is eating traditional TV alive. Eating/destroying does not imply profitable. Look at streaming vs. the music industry, for example. I would argue that all the changes that Google has been making to YouTube show that it, in fact, isn't particularly profitable.
- KaiserPro 12y ago
  Nope, its not profitable. Infact, like the sun its dilated the advertising dollar, which means not only traditional TV mediums are loosing viewers to, they are loosing value per advertising minute sold. Its also not eating traditional TV. You don't sit down to watch a series on youtube. There is no such thing as longform youtube. There are no profitable 30minute episodic videos on youtube that aren't pirated. Content is king, and if you are producing shit content (cough 90% of the US TV market) saturated with adverts and repetition, users don't turn to youtube, they turn to netflix. Netflix will eat all, Youtube is, and unless something changes (like no user uploads) will always be a subsidised media charity store. Yes, its cornered the MTV music video and nutshot compilation market. It has enabled niche video makers for things like hobbies and such. but there is literally no money in that either.
  - DanBC 12y ago
jedrek 12y ago
Is television profitable if TV ad $ goes puff? No.
- flippant 12y ago
  Cable television would remain unaffected.
- ddorian43 12y ago
  Reread my sentence. I didn't say 'youtube ads $' I said, 'google search-engine ad $'. In another form, if youtube is separated from google, is it profitable ? Can it?

JacobAldridge 12y ago

Nice mea culpa, and a day after the "101 random and mutually exclusive ways we wanted to fix Apple in 1997". No doubt obervers, critics, and expert opinions have their place. But never underestimate the man in the arena - especially if you are the man or woman in the arena.

mhomde 12y ago

Everyone is right, sooner or later

mg1982 12y ago

He says Google got 100x their investment since it's 'worth' that multiple of what they paid. I don't think it's a valid argument since they paid real cash and have only a notional value in return. It's hard to see anyone forking over $100bn+ for youtube, and I doubt it's even made enough profit since they bought it to cover what they paid originally paid. None of this is to particularly criticise either the original post or its followup - it takes courage to call it as you see it and then own up to your mistakes, but it's always worth taking another pass at the figures to see if they really stack up.

bachback 12y ago

Very interesting. There is a very good interview with Chad about the wild ride: https://www.youtube.com/watch?v=l56Hw5H-DEI https://www.youtube.com/watch?v=l56Hw5H-DEI He talks quite a bit about their situation then. Not many startups go from 0$ to 1.65B$ in 22 months. Jason did not mention that Google itself was not a real business for a very long time. Are there good writeups of how Google managed to crack the biggest jackpot in business history with AdSense? Sure this experience taught them the lesson which they applied here. In poker terms it's like a draw to the nuts.

jasode 12y ago
>...of how Google managed to crack the biggest jackpot in business history with AdSense? To clarify, it was AdWords, not AdSense. AdWords (2000) was the original monetization strategy and is still the #1 contributor to revenue and profits today. AdSense (2003) came later. It's easy to get AdWords and AdSense mixed up because both brandnames are nondescriptive. Both AdWords & AdSense are based on "keywords" and both "senses" or "tries to make sense of" page content to generate relevant ad links.
devonkim 12y ago
IIRC, Google bought AdSense from a kid, and when integrated with their search it finally took off monetarily. Note that AdWords != AdSense either. I've got to admit that most acquisitions I've seen hardly result in an actual revenue increase all that quickly. At least Google is a mixed bag when it acquires as opposed to many others that pretty much as a rule have acquisitions that barely replace the value lost in other lines of business.

pja 12y ago

It wasn’t just the lawsuits - IIRC YouTube the business was also bleeding money at a terrifying rate thanks to infrastructure costs (servers, bandwidth) even without the legal problems. When Google took them on they were able to cut their costs to the bone by using capacity on Google’s internal fibre network which had been bought up cheap after the first dotcom crash & moving the data over to Google’s server infrastructure. Could anyone else have bought YouTube & managed to turn the business around apart from Google? It seems to me that YouTube was one of those businesses that had negative worth to all except a very few buyers. Did anyone else have the infrastructure knowledge to do what Google was able to do at the time?

higherpurpose 12y ago
It's interesting to look back from a historical point of view and realize that Youtube would've probably been closed down eventually just like Grooveshark, had Google not bought it and put its very best lawyers on the case. Now look what Youtube has become. Can anyone imagine the world now without Youtube or a Youtube-like service? Who knows what the world could've been if Grooveshark was also acquired by a big company and won its lawsuits. Maybe it would've turned into a major free audio-book platform, or a major podcast platform, or a major indie music artist platform (like how many new artists became popular on Youtube first). The studios really are innovation killers in their quest to only be paid through the old business models. They only change when they have no choice but to accept the change (like when losing lawsuits against certain companies which they try to shut down). Then they act as if they encouraged that sort of innovation in the first place when they testify in Congress for new copyright laws. Anyone still remember Turntable.fm? Yeah, they killed that one, too, and I remember it was seen as a highly innovative service.
- KaiserPro 12y ago
  The problem is that small producers loose out. Unless you are very lucky, its almost impossible to make money. Worse still Google are pernicious in their licensing deals. I would postulate that Google is actually worse for small producers than your traditional record company. At least you could change record company and still distribute material. If you upload to youtube, you loose exclusive licensing rights. worse still because they own the platform as well, you have no choice but to upload to youtube.

anthony_franco 12y ago

Very few people know this, but I remember when MySpace almost killed YouTube. Yes, MySpace. YouTube blew up in popularity when everyone was adding videos to their MySpace profiles. And suddenly one day MySpace decided to block all YouTube embeds (they'd occasionally do this with other services as well.) At the time YouTube was just a small startup without much muscle behind it. All they could do is write a blog post pleading their users to contact MySpace to allow their videos. And it worked, a week later MySpace lifted the ban and it allowed YouTube to reach astronomical growth. Edit: Here's a link to the blog post mentioned https://web.archive.org/web/20051223152529/http://youtube.com/blog https://web.archive.org/web/20051223152529/http://youtube.co...

ceeK 12y ago
It's nice to hear of things like this. It's refreshing to remember that even the most successful startups had to go through make or break moments, and that it wasn't all smooth sailing.
hippich 12y ago
lucky youtube, since myspace totally could instead "import" videos when detecting embed.
- pjc50 12y ago
  What do you mean? Bulk copyright infringement?
  - dublinben 12y ago
    As if any of the content on Youtube at that time was licensed? They owe all of their early success to "bulk copyright infringement."
fzn 12y ago
https://www.youtube.com/profile?user=justinrotnluk https://www.youtube.com/profile?user=justinrotnluk Funny to notice the profile was suspended... Twists. Edit: that user was especially thanked by YouTube on the latter IA blog post.

fx85ms 12y ago

> “we’re sorry that’s not our problem — we’re a platform” approach. An approach that is now the standard for disruptive startups. I truly agree with this on the "disruptive startups" part. Pretty nifty way to avoid all sort of legal troubles, don't you think?

icebraining 12y ago
Not particularly "nifty", it's the standard way for centuries. You don't get to sue the Postal Service if someone sends an unlicensed copy of your work through it.
- deleted 12y ago
  [deleted]

deleted 12y ago

[deleted]

amelius 12y ago

Well, I think any experienced programmer could write a reasonable approximation to youtube in a weekend in their basement. So from that point of view, youtube is not really a business. However, as a "brand", it is of course quite strong. It seems to me that we have to come to the sad conclusion that building a business is more and more about building brands and locking in customers (into your ecosystem/social network), and less and less about the actual technology, which is ubiquitous after all.

bsenftner 12y ago
I think any experienced programmer knows that in a weekend you've barely begun to understand the problem you're trying to solve.
ajdlinux 12y ago
An experienced programmer can cobble together a moderately buggy, YouTube-esque site which kind-of-works for whatever video formats that can be converted by their local ffmpeg install, and allows a basic commenting system and upvotes/downvotes, running on a handful of servers capable of storing a few terabytes of data. YouTube, on the other hand, stores so much video that they can't actually tell you how much storage they have online at any one time. They have to process 300 hours of newly-uploaded video per minute, which they then have to serve up to millions of simultaneous visitors through a network of data centres with many thousands of servers spread around the world. On top of this, they have to deal with analytics, advertising, account management, copyright compliance, and everything else they have to do, on the huge scale on which they operate. That's not a minor technical achievement.
- jacquesm 12y ago
  Youtube did not start with the tech infrastructure they have today. They started with that moderately buggy site which kind of worked for those formats that their local ffmpeg could handle without comments and votes and could maybe store a few terabytes of data. Don't look at the situation today (or even 3 months post launch) to see what a youtube like MVP could look like.

kazinator 12y ago

Meta dupe chain! https://news.ycombinator.com/item?id=9437641 https://news.ycombinator.com/item?id=9437641 It's a HN submission about a blog post, and that blog post is is about (a reaction to) the previous submission, which is about a previous blog post by the same blogger.

deleted 12y ago

[deleted]

logicallee 12y ago

>At the time I wrote that post, YouTube was not a real business; [...] The fact that they were forced to sell a business that is now worth $100-150b for $1.6b is a good indication for how close to the brink of destruction they were. I don't follow this point. How is selling something to Google for $1.6b an indication of being on the brink of destruction? And if the point here is that they were worth a discounted $100b then (so sold undervalued), how can that be the brink of destruction either? Either way I don't follow the author's reasoning here. It sounds like he's saying, "they were REALLY worth a discounted ~$100b, but they were in such dire straits they had to sell for 1.6% of that." But that contradicts his point that it wasn't a 'real' business. So either way, I don't see how that sentence supports the point he is making.

adventured 12y ago
Not to mention he missed by a mile on the valuation estimate. YouTube isn't worth anywhere near $100b-$150b. Netflix has a better business model, a track-record of profitability, more revenue and nearly 60 million paying subscribers. It's worth $33 billion by comparison (and is itself carrying a hyper valuation at 100-200 times earnings typically). Netflix is the general ceiling on YouTube's valuation.
- logicallee 12y ago
  Yes, I agree and had an objection to that number in my first edit. It's obvious that YouTube isn't worth anywhere near $100B. What made me remove it is that Google itself is valued at 371B, so the idea that YouTube constitutes 26% of that valuation is something in the realm of what someone could defend. (To compare with your numbers, YouTube.com is the third-most visited site on the planet, after Google.com and Facebook.com [1][2] and has "more than 1 billion users" [3] along with 50% monthly growth according to that page. Since YouTube isn't in the same business as Netflix (VOD), it's hard to use that as a cap on its valuation.) The author's valuation of YouTube today is probably still inflated by a large multiple. You suggest a cap on YouTube of 8.9% of Google's valuation ($33B), perhaps that's fair, but it's hard to say as it's not an independent business. [1] http://www.alexa.com/topsites http://www.alexa.com/topsites [2] http://en.wikipedia.org/wiki/List_of_most_popular_websites http://en.wikipedia.org/wiki/List_of_most_popular_websites [3] https://www.youtube.com/yt/press/statistics.html https://www.youtube.com/yt/press/statistics.html

jroseattle 12y ago

I think Jason is overstating Google's risk acceptance with the Youtube acquisition. "Napster, Kazaa, and countless other media sharing services had been absolutely crushed..." did not happen by being out-litigated. They were over-litigated -- they simply didn't have the capital resources to commit to the legal challenges ahead of them. Google didn't have that problem. Google was also the darling of Wall Street, Sili Valley, tech culture, etc. which translated to a built-in victory in the court of public opinion. There was certainly legal risk involved, but they had a much more level playing field with the content producers.

nolok 12y ago
Actually the two named example given, Napster and Kazaa, where out-litigated. See http://en.wikipedia.org/wiki/Napster http://en.wikipedia.org/wiki/Napster > Initially Napster lost the case in the District Court but then appealed to the U.S. Court of Appeals for the Ninth Circuit. Although it was clear that Napster could potentially have commercially significant non-infringing uses, the Ninth Circuit upheld the District Court's decision. Immediately after, the District Court commanded Napster to keep track of the activities of its network and to restrict access to infringing material when informed of that material's location. Napster wasn't able to comply and thus had to close down its service in July 2001 And http://en.wikipedia.org/wiki/Kazaa http://en.wikipedia.org/wiki/Kazaa (not quoting a particular paragraph in this one as the "lawsuit" section is very long covering several countries, but it basically turns to "kazaa lost, started settling with all plaintiffs and agreed to turn into yet another legal music selling service clone").
- jroseattle 12y ago
  Napster filed for bankruptcy in 2001 and blamed their "enormous legal fees" as the primary cause. (Outside of, you know, having any actual revenue.) Kazaa was in the same boat. It's true, they did participate in some lawsuits, but they were going to be overwhelmed by the sheer volume of legal activity (the very purpose of which was to drain them of resources.) Appeals, filings in multiple districts, etc. Back to Google/Youtube -- Google had the resources to sustain any sort of legal onslaught by the RIAA. In fact, more so as those companies started to see their profits decline steadily during the mid 2000s, and the prospect of winning a protracted legal battle wasn't so certain. As a bully, it's much easier to take the little kids' lunch money, but not so much fun when you encounter a much bigger kid on the playground.

skue 12y ago

> The fact that they were forced to sell a business that is now worth $100-150b for $1.6b is a good indication for how close to the brink of destruction they were. As a founder, I dream of having a company that close to the brink of destruction.