YouTube is a free video-sharing website on which users can distribute their video clips – short films in video format primarily found on the Internet. The site was founded in February 2005 by American-born Chad Hurley, Taiwan-born Steve Chen and Jawed Karim, born in East Germany of Bangladeshi decent. All three were former employees of PayPal, the Internet payment-transfer company. A preview of the YouTube website was presented to the public in May 2005 and officially launched six month later with the initial headquarters in San Mateo,
The venture gains
YouTube was initially funded by a so-called angel investor, a wealthy individual who provides business start-up capital, usually with a share in ownership. In November 2005, Sequoia Capital, the venture capital company founded by Donald T. (Don) Valentine invested US$ 3.5 million in YouTube. Don had previously funded various other successful technology companies. Roelof Botha, a partner in Sequoia Capital and former PayPal financial director, joined the YouTube executive board. Following impressive growth within a few short months, Sequoia Capital invested a further US$ 8 million in YouTube
Protests provide impetus
YouTube’s rapid expansion quickly caught the attention of the traditional media. Despite official YouTube policy prohibiting uploading of copyrighted material and the company’s efforts to regularly remove uploaded content infringing copyright laws, a large amount of such content continues to be uploaded. In February 2006, NBC requested removal of its copyright content from the YouTube website. Although YouTube complied with NBC’s request, the incident hit the news and the increased publicity gave even more impetus to YouTube expansion.
NBC then realised the truth of the old saying “If you can’t beat ‘em, join ‘em!” and in June 2006 announced a strategic partnership with YouTube. An official NBC channel would be set up on YouTube presenting promotional clips of the TV series ‘The Office’ and YouTube would also promote NBC’s videos on its website. CBS, which had previously also requested the removal of various video clips, followed suit in July 2006. Nevertheless, copyright lawsuits are likely to plague YouTube sooner or later.
Fast lane to fame
YouTube’s success has also catapulted a number of unknowns to Internet-celebrity status. One is Peter Oakley, known as geriatric1927, from Leicester in the UK. The widowed pensioner, born in 1927, gained instant popularity with a series of autobiographical videos entitled ‘Telling it All’, revealing various aspects of his life including his service in World War II. YouTube has also provided a launching pad for new bands and their music. OK Go, the rock band from Chicago and Washington DC, and Sick Puppies, the Indie rock band from Sydney, Australia both became famous almost overnight through YouTube.
In summer 2006, YouTube became one of the fastest growing websites in the world, rated as the fifth most popular website by Alexa, a company providing web-traffic statistics to other sites. Surveys conducted in July 2006 showed that 100 million clips were viewed daily on YouTube, 65,000 new clips were uploaded every 24 hours and the website was visited 20 million times each month.
In October 2006, it was announced that Google would acquire YouTube for US$ 1.65 billion. The company would continue operating independently and keep its co-founders and all employees. The deal went through on 13 November 2006, marking Google’s biggest purchase to date.