How much is a website worth?

If You Saw It on the Net, You Probably Saw It On YouTube

A bunch of things came together to make it work.

Probably the first were cheap video recorders. You slide down the ice covered sidewalk could be immortalized forever on your buddy's camcorder, or even his cell-phone. The question was how to easily show it to enough friends to guarantee maximum embarrassment?

This may not have been the exact question that three friends who were working at PayPal asked themselves. Legend has it that two of the friends were at a dinner party together and someone took video of the event. The question arose, how to share this footage?

The three friends were Chad Hurley, Steve Chen, and Jawed Karim. Karim wasn't at the party, and denies that it happened, but it is a good story!

The friend came together through their work at PayPal. Hurley had been a design student while Chen and Karim had been computer science students together. Their employer, PayPal, was experiencing dizzying growth after being bought by eBay in 2002, so the friends had some taste of the potential of the Internet, and would have understood the importance of capital to realize that potential.

The domain was registered on Valentines Day, 2005, and the first video of Karim at the San Diego Zoo was uploaded on Apr 23.

YouTube is a very expensive site to run because of the large amount of bandwidth required for its services. It required an $11.5 million investment from Sequoia Capital between Nov 2005 and Apr 2006. To attract traffic to the site the company announced that it would give away an iPod Nano to a random user through its first year in business. However in Jul 2006 YouTube announced that 64,000 new videos were being uploaded and 100 were being viewed on a daily basis.

Controversy over content and copyrights have been with YouTube from the beginning. In 2007 reached an agreement with several networks and film distribution companies to show full length features and shows. YouTube claims that 48 hours of content is uploaded every minute. Three quarters of that comes from outside the US. YouTube is the third most visited site on the Internet after Google and Facebook.

Google purchased YouTube in 2006 for $1.65 billion in Google Stock.

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