YouTube Now and in the Future

00:52 in Youtube

In some ways it's the classic Silicon Valley success story, complete with garage. Chad Hurley, Jawed Karim, and Steve Chen became friends when they worked for PayPal where Karim was one of the founders. In early 2005 they were at a dinner party to which many people had brought their camcorders. Conversation turned to how hard it was to share videos with others using the internet. That inspired the friends to set off to Hurley's garage to write some code that would make online video sharing easy.

By February they were testing their system online and receiving a great response. The response was strong enough that in November YouTube received $3.5 million in venture capital funding from Sequoia Capital. Millions of people seem to have been waiting for YouTube. When the site launched officially, in December 2005, it already had more than a million short video clips. Later that month visitors were uploading 8000 clips a day and viewing 3 million.

By April 2006 visitors were watching 35 million videos a day. The company received another round of funding from Sequoia Capital: $8 million to expand sales and marketing efforts and build-out the data centers. In October, Google agreed to buy YouTube for $1.65 billion in Google stock. At that point YouTube visitors were downloading over 100 million videos a day. The purchase was finalized in February 2007.

Speaking at the Library of Congress in June 2008, Professor Michael Wesch of Kansas State University described the impact of YouTube. "YouTube produced more hours of video in the past six months than the three major networks have produced since 1948."

Clearly, YouTube is an important force on the internet and in digital media but as Professor Wesch also noted, the vast majority of videos on YouTube today are short, amateur videos of three minutes or less. YouTube today is not what YouTube will be in a year or three years. The changes are driven by some powerful trends and will follow predictable patterns; Understanding them will help you get out in front of the curve.