YouTube has become a household name since the website launched as a versatile, multi-functional, and ever-expanding video sharing website. It was nicknamed “GooTube” after Google acquired ownership of it on November 13, 2006.
It started out as an online dating website in February 2005 by a team of three former PayPal employees: Chad Hurley, a graduate of the University of Pennsylvania specializing in design; Steve Chen and Jawed Karim, both graduates of the college of computer science at the University of Illinois at Urbana-Champaign. With the help of some investors, they were able to raise some money to maintain the site and their office, then a makeshift in a garage.
The concept of online dating was the limiting factor of the website thus, only a few would visit, view, and post their videos. That’s why on April 2006, the site was opened up for everyone, not just for dating purposes. Visitors can then search for videos, links to related videos, as well as the capability to tag videos regardless of content or purpose. Coupled with greater access to video cameras and cell phones and the video-sharing community, YouTube has become a phenomenon.
Due to the YouTube’s stellar growth and popularity, it has become one of the most promising business enterprises over the internet. This prompted Google to purchase the company for US$1.65 billion in stock which was their second largest acquisition at that time. It has then become an advertisement-based with a monthly income of 15 million dollars.
To keep up with the growing demands of incoming users, visitors, and advertisers, YouTube required more bandwith and other capabilities and functions. Some estimated the upkeep to be around 5 to 6 million dollars a month. But this was too minimal compared to the site’s revenue which is derived mainly from advertising. Some even considered YouTube to be an ideal business model because of its versatility and flexibility.
According to one of the founders of YouTube, the secret of their success is in the site’s capability to attract an indefinite number of people from every walks of life and creating an online community sharing varied interests through video-sharing, comments, etc, all of these for free.
First you give them something they want absolutely free. This will usher an indefinitely large volume of users and visitors – potential buyers or subscribers to online business entrepreneurs. This is what makes YouTube so effective as an advertising site. Revenues from advertising will then be used to improve its services to encourage more users and subscribes, and the cycle of growth continues.
YouTube’s success is also contributed to its sensitivity to change. It won’t stop from adding more features and capabilities and will be ever more promising as an online business venture in the future.
News Update: April 12, 2011, YouTube Live recently launched its live broadcasting service. This will allow some YouTube partners to live stream from their channels in the future. The plan is to allow 20 channels of good standing to showcase their professionally produced programs directly into the YouTube live platform.
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