As you may have heard, there’s this little company thingy called YouTube that’s gotten a little popular lately, and then there were all these big companies that got interested in getting some of that popularity for themselves, because, like, they thought that it could make them some money, and, like, open up glorious new ways of communicating. And then this other company called Google got interested, and… well, 1.65 billion dollars and a lunch at Denny’s later, you know the rest.
I saw a bit of that video — on YouTube, natch — where founders Chad Hurley and Steven Chen get a little gloat on, calling the union of YouTube and Google that of “two kings.” But there’s long been rumored to be — OK, reported and confirmed — a Third Man behind the video site sensation, and of course, that man is desi.
At least from this New York Times profile, Jawed Karim, 27, sounds like a thoroughly nice guy and likeable nerd, and one with a knack for good ideas and an appetite for seeing them enacted. He was already an early participant in PayPal. But through his rise as an Internet multi-millionaire his chief focus has been academia.
Mr. Karim said he might keep a hand in entrepreneurship, and he dreams of having an impact on the way people use the Internet — something he has already done. Philanthropy may have some appeal, down the road. But mostly he just wants to be a professor. He said he simply hopes to follow in the footsteps of other Stanford academics who struck it rich in Silicon Valley and went back to teaching. …
David L. Dill, a professor of computer science at Stanford, said Mr. KarimÂ’s choice was unusual.
“I’m impressed that given his success in business he decided to do the master’s program here,” Mr. Dill said. “The tradition here has been in the other direction,” he said, pointing to the founders of Google and Yahoo, who left Stanford for the business world.
So it couldn’t happen to a nicer guy, and here’s a round of Sepia congratulations to Jawed. (No word on whether he’s single.) Beyond that, I’m curious about what all you tech and media macacas out there think of the whole YouTube thing. Obviously, it’s viral as a mofo and pretty fun to surf around. But do folks consistently use it to post their own content? Is it just a library of pre-existing content that at some point will find an intellectual-property arrangement with original providers and a commercial business model? Or is it a harbinger of paradigmatic change?
How many hours a day does the average family spend in front of the free TV? How many eyeballs gawk at YouTube every day? How much time do you spend on the free internet?
Firstly, you wont ever need to watch 30 second ads before using google’s office suite. Text ads is all you will have to put up with. Secondly, people are used to watching commercials any way in order to get broadcast TV for free. So watching ads while getting free TV, videos, music, movies etc anytime, anywhere at your convenience, wont be a deal breaker at all, to most of the public.
In the new, and superior paradigm, the commercials experience will also be far better: the ads will be targeted to the individual downloader.
There will be a number of players, not just Google. Just as there are a number of TV networks today. I predict there will be strong competition for content. Maybe Google, Yahoo, Microsoft will try to buy a media conglomerate.
Free (and searchable) music and videos, with targeted commercials, is the future Google is shooting for. Right now Yahoo Music Engine charges what $5 a month or so to listen to unlimited songs. Google would do that, and videos, for free with commercials. That will certainly rope in a far greater audience. Google has grand plans and its sticking to its proven business model which is attractive to both consumers and advertisers.
There is no doubt this is the future.
There aren’t any pre-roll ads on YouTube yet.
Watch what happens when growth slows. They’re a public company and will have to dance for the Street.
For content, yes. For tools and office software, no way will anything larger than a mom & pop biz put up with ads. AFAIK Google is selling ad-free mail today to such businesses (might be wrong on this).
ManishV:
I can proudly say that I have never paid for content on the web. Scratch that… I’ve paid for some content.
It is funny to read your comment here and your complaints about AirTel on your blog. Just goes to show, just because you pay for it doesn’t mean it isn’t crappy.
So in my book, free and crappy beat paid for and crappy everyday.
The problem is the opposite: poeple aren’t paying enough. Airtel’s problem is that mobile rates in India are the lowest in the world, so they’re soaking prepaid users and subsidizing postpaid (subscribers).
What they should do if they’re not profitable (and AFAIK they are) increase rates. And the entire country has to get richer (-> value for time -> low tolerance for spam) for that to be competitively viable.
With their current strategy I’d have dropped them in a heartbeat had I not needed backup dialup Net access. If I can find that elsewhere I’ll immediatly stop recharging.
And paid for and good beats both.
ManishV:
The prepaid market in India is extremely competitive. They have no choice but to keep rates low and it seems that they are doing well (as far as the group earning statements go. It is a PDF). I was still shocked at the overages charged (Rs.500 card with Rs.350 calling time).
I agree that as a community the folks in the motherland put up with a lot more intrusive adverts than we would stateside. I bought a tape of music for my mum and it had an ad for another recording in it. A DVD of music (complete waste of money) had the annoying Airtel ad for ring tones crawling across the bottom when the video was playing. Did not seem to bother my folks as much as it did me.
When I say prepaid users are being soaked, I mean by spam (time value), not by rates.
Yes, very much so.
I’m wondering how YouTube will avoid legal problems…as of now, anyone can put up copywritten material…seems like Napster-type problems might be in its futurw.
I think we have to separate commercialization of everything under the sun from spam.
When you have to go through an ad to get service you have already paid for, that would in my book qualify as spam.
Some of my relatives had the sign for their colony paid for by the local saree shop. I thought it was a bit off but they had no problem with it and I understood why. If your neighbourhood shopwallah wants to make a few extra bucks by selling ad space on his hoarding to Airtel/Pepsi/Pears soap I don’t think it is spam.
I agree with the overall sentiment sentiment though.
the founders of you tube did a great thing my selling it
now that google has control, all the people claiming copyright violation (which you tube is full of) acutally have strong financial motives to sue you tube
might be google’s biggest blunder yet …
So here’s my question. When Microsoft started trying to take over the world, everyone said, “hey, there’s this dude Bill Gates who’s trying to take over the world, we must stop him!” Now, Google is trying to take over the world, but under the pretense of two wanna be hippie twenty somethings who will “do no evil” (horses**t…see the Great Firewall of China). Why aren’t people reacting with the same animosity towards google that they did toward Microsoft? I will grant that Microsoft products have been sub-par compared to its competitors (read: Macintosh), and Google does not have that same problem. But still, I am scared of these wanna-be hippie mofos and am wondering why no one else is scared.
Why aren’t people reacting with the same animosity towards google that they did toward Microsoft?
i think it took a while for M$ hostility to really take root, and by that time they had come and conquered.
I don’t see any contribution from Desiland in his upbringing. Germany played a role in his parentÂ’s success. He is White and never has to overcome Desi barrier to hit big. Everyone treated him as another American White male.
So what is your point Neena ?
Also, a great deal of the hostility Bill Gates and crew generated was by their amazing ability to leverage what were previously individual shrink-wrapped products against each other, and also force manufacturers to bundle MS operating systems onto their machines. Basically, he made a lot of enemies out of companies did business with. Google hasn’t really done anything like that. They tend to form partnerships with warm fuzzy organizations (NASA, universities, etc).
Though who knows? There are plenty of ways to make enemies, I guess.
JayV (#51): Yeah, not even kind of a coincidence. I remember thinking the exact same thing listening to WAMU in the mornings. 🙂 And Saylor’s ego is still a huge problem for that company.
Salil #38, Ofcourse I was joking about it being free. But here’s some comparison. YHOO Rev. 6 billion Market cap 33 billion trailing P/E 65 GOOG Rev. 8 billion Market cap 125 billion trailing P/E 28
So GOOG is twice as costly as YHOO. Although the street looks at forward P/E based on projected earnings, I still think that GOOG may be overpriced.
I say to brother Jawed, Cash in the chips now!! Remember a little company called Broadcast.com and a guy called Mark Cuban. Well he sold his company for 1.x billion to Yahoo and cashed out in mid 2000 at the top. Then he went and bought the Dallas Mavericks.
poop…thatz brown.
Notto quibble,butCuban sold to Yahoo then collared the stock (an options strategy that protects you if the stock goes down). I don’t think he sold until he needed cash.Thus by receiving Yahoo stock instead of cash he didn’t pay taxes until he sold the stock, and since he collared the stock (to be safe) instead of selling it (to be safe) he delayed taxes further, and taxes deferred are taxes not paid.
The American Way.
taxes and Manju reminded me of this:
“To spend is to tax. There are no tax cuts. There are only tax shifts”[1].
two things i wanted to add:
vc’s likely owned 50% of youtube, not 30%
lashback/suspicion of google exists and is growing, in the valley. companies are frustrated that it’s hard to get talent (everyone and their donkey wants to work at goog apparently… not me tho). also, every startup has to face a similar question asked 10 years ago. “is google doing something like this? could they do something like this easily?” and any answers that hint goog could touch on this area makes VC’s clench their wallets…
ummm…don’t mean to be the party pooper here but youtube is just a fad that will pass, just as quick as the big dot com bubble imploded. sure there’s some value to it but are a bunch of home videos worth $1.6 billion. you can bet your brown behind they’re not. did the kings do the right thing by exiting at the time? absolutely. all those promises of turning eyeballs into dollars are just that – promises.
Free gourmet lunches and snacks everyday? Hell yea everyone wants to work for goog.
My understanding is that Sequoia Capital went in alone for $11 Mill, which gave them 30% of you tube. Sounds a tad low for a startup but maybe Youtube wasn’t burning much cash or wisely raised $$ when they didn’t desperately need it, or had alternatives.
i’ve eaten there. a lot in fact. the food’s decent but not amazing. and anyway it just serves as another leash to keep you tied to work… not for me.
Yeah, the free food and the laundromats and the massages and all that definitely serve as cube-leashes. Google tends to pay comparatively lower salaries compared to other tech companies in the area, too. I don’t think it’s because other companies have to pay higher salaries to compensate for Google’s perks, either. Yahoo has similar perks (though their food isn’t as good, if you ask me).
And for any worker above the rank-and-file, free food and all that crap isn’t really going to be taken seriously. Salary, equity, and the potential for riches are all that work at the management level. So they can attract all kinds of engineers with their perks. I think the remainder of the company work there for other reasons: pride, a feeling of community, etc.
After doing some more research this last week, I can see more compelling reasons for why Google made this purchase. But I still maintain that it’s not exactly good business.
Absolutgcs (#70):
When they should be asking, “Should WE fund a company to do this? Does it make sense? Will it make money?” Just because Google does it, or could do it with some development effort, doesn’t make it a good idea, right?
In comment #66, Shri RC said:
Then I read today on Ultrabrown’s news section that YouTube Founders, Investors File to Sell Google Stock
That would mean only one thing. They are listening to me 🙂 and I am in the wrong business, I should have been on wall street.
Entertainment giant Viacom Media says it will sue web search engine Google and its video-sharing website YouTube for $1bn (£517m)
http://news.bbc.co.uk/2/hi/business/6446193.stm