It was a bombshell even by Silicon Valley standards: A profitless Web site started by three 20-somethings after a late-night dinner party is sold for more than a billion dollars, instantly turning dozens of its employees into paper millionaires.
Google's announcement in October 2006 that it was buying YouTube for $1.65 billion in stock dwarfed other post-bubble Internet deals, and its acquisition of the video-sharing phenomenon was seen as cash-on-the-barrel validation of Internet resurgence known as Web 2.0. YouTube had been coveted by virtually every big media and technology company, as they seek to tap into a generation of consumers who are viewing 100 million short videos on the site every day. Google is expected to try to make money from YouTube by integrating the site with its search technology and search-based advertising program.
YouTube's success was based on how easy its software made it for ordinary computer users to upload videos, and the network effect that meant that the more material that was uploaded, the more attractive the site became for viewers, and therefore for others seeking to share content.
It was a formula that drew heavy traffic, but produced little revenue. Critics also said that much of YouTube's material was posted in violation of copyright restrictions. And even before its purchase YouTube had struck accords to license content from two of the four major music conglomerates — the Universal Music Group and Sony BMG Music Entertainment — and the CBS television network in exchange for a percentage of YouTube’s advertising revenue.
But not all mainstream entertainment companies wanted to follow suit. In 2007,Viacom, the parent company of MTV, Nickelodeon and Comedy Central, filed a wide-ranging lawsuit against Google on Tuesday, accusing it of “massive copyright infringement.” Viacom said it was seeking more than $1 billion in damages and an injunction prohibiting Google and YouTube from committing further infringement.
Citing the immense amount that Google paid for YouTube, the complaint said that “YouTube deliberately built up a library of infringing works to draw traffic to the YouTube site, enabling it to gain a commanding market share, earn significant revenues and increase its enterprise value.” The complaint was filed in United States District Court in New York. Google responded that copyright law shields it from liability for clips posted by its users.
Selected Articles About YouTube
Google Told to Turn Over User Data of YouTube
The order raised concerns that the online video viewing habits of tens of millions of people could be exposed.
July 4, 2008TechnologyNewsFinding Political News Online, the Young Pass It On
Younger voters tend to be not just consumers of news but conduits as well, sending out links and videos to friends.
March 27, 2008U.S.NewsWhoseTube? Viacom Sues Google Over Video Clips
Accusing Google and its YouTube site of “massive copyright infringement,” Viacom said it was seeking more than $1 billion in damages.
March 14, 2007TechnologyNewsDot-Com Boom Echoed in Deal to Buy YouTube
YouTube, the darling of the Web 2.0. resurgence, fetched $1.65 billion.
October 10, 2006TechnologySidebarARTICLES ABOUT YOUTUBE
A Private Dance? Four Million Web Fans Say No
“Dancing,” which more than four million people have viewed on YouTube, is the online equivalent of a platinum hit, seeping from one computer to the next like a virus.
July 8, 2008File-Sharing Fetish
Eclectic video-sharing that doesn’t succumb to the porn imperative.
July 6, 2008Political Freelancers Use Web to Join the Attack
In the 2008 election, the most attention-grabbing attacks are often coming from people outside professional politics.
June 29, 2008Some ‘Camp Rock,’ Some ‘Enchanted,’ Lots of Avril
Thanks to “Camp Rock,” seen by 8.9 million people during its premiere, Demi Lovato is a could-be child star no longer.
June 26, 2008Coming Soon to YouTube: My Face-Lift
Doctors have long recruited patients to help advertise, but is it ethical for a doctor to reward a patient for posting a promo?
June 26, 2008Fight Terror With YouTube
A more interactive, empowered online community, particularly in the Arab-Islamic world, may prove to be Al Qaeda’s Achilles’ heel.
June 26, 2008More Time Spent With Online Videos
The number of Internet users watching videos on YouTube and other Web sites rose only slightly in the last year. But each user is watching far more video than before.
June 23, 2008Ending in Main Event Raises Fans’ Suspicions
In the aftermath of Kimbo Slice’s controversial win on Saturday, mixed martial arts fans expressed their displeasure via the Internet.
June 3, 2008Underdog Taps YouTube to Make Election Close
Political pros say that for the first time in a statewide race, YouTube had the crucial multiplier effect, turning an underfinanced campaign into a serious contender.
June 2, 2008A Video Camera for Anyone Exhibiting on YouTube
The JVC Everio GZ-MS100 video camera has a special upload button that automatically uploads your video to YouTube when the camera is connected to a PC.
May 29, 2008Pixels at an Exhibition
Art, mystery and the meaning of YouTube.
May 18, 2008You’ve Seen the YouTube Video; Now Try the Documentary
Only after “Battle of Kruger” an eight-minute African safari video became one of the most popular videos in YouTube’s history did the television buyers come calling.
May 10, 2008Friends May Be the Best Guide Through the Noise
New companies are trying to solve a problem that the Internet itself created gathering the dense jungle of user-generated content across several platforms into one stream.
May 4, 2008Boot Up for the Big Easy
The idea of holding a forum in New Orleans, with questions zapped in over the Internet, should strike the presidential candidates as irresistible.
May 1, 2008Not Speaking for Obama, Pastor Speaks for Himself, at Length
It turns out that the Rev. Jeremiah A. Wright Jr. doesn’t hate America, but he loves the sound of his own voice.
April 29, 2008SEARCH 314 ARTICLES ABOUT YOUTUBE:
MOST POPULAR
- U.S. Weighs Takeover of Two Mortgage Giants
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- Unboxed: If You’re Open to Growth, You Tend to Grow
- Deal for Anheuser-Busch Is Said to Be Near
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- Small Business Is Latest Focus in Health Fight
- Drug Industry to Announce Revised Code on Marketing
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- When News Is the Story
- On Day Care, Google Makes a Rare Fumble
- Fannie Mae and Freddie Mac Shares Tumble
- Asleep at the Spigot
- Fed to Clamp Down on Exotic and Subprime Loans
- Why Fly When You Can Float?
- Ex-Prosecutor's Book Accuses Bush of Murder
- At $100 for Tank of Gas, Some Choke on 'Fill It'
- Psst! Hear the Rumor of the Day?
- InBev Said to Be Close to Deal on Anheuser-Busch