Google and You Tube

October 10th, 2006 at 6:12 pm by David Farrar

Today’s news that Google has purchased YouTube for US$1.65 billion is a good reminder of how a quality product can beat a good brand on the .

We saw this with Google itself. Prior to Google most people used Alta Vista for searches. It si now basically defunct.

Google has many great products. But last year when they launched Google Video, their site wasn’t that great. You Tube on the other hand had better features, better viewing, great use of tags etc and within months almost everyone was using You Tube instead of Google Video.

This is the great thing about the Internet. Quality is rewarded. You can produce the bets hamburger in the world but you won’t overtake McDonalds for market share without a couple of decades to spare and a huge marketing budget. On the Net market share can flow and ebb within weeks.

You Tube has 100 million (yes million) video clipes viewed a day, with an additional 65,000 also added on daily. Juha estimates their bandwidth is 200 terabytes a day!

Anyway the three founders who set this up are now all massively rich – because thay had an idea and a vision and followed it through. Capitalism at work :-)

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16 Responses to “Google and You Tube”

  1. Polemic () says:

    Sure, although it is yet to turn a profit.

    Bit like 42 Below too.

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  2. rightline () says:

    No wonder my broadband speed is down to 90KB/s at 6PM

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  3. Kimble () says:

    Polemic, the company wasnt bought for its current profit stream, very few companies are. Youtube fits nicely into Googles business plan. They had a division that didnt work, so they shut it down and bought a company that did.

    42 Below also wasnt purchased based on its current income stream. That company was formed to do exactly what it did, build a brand. And the brand it built is top shelf. The brand is an intangible asset, but can often be worth more than the rest of the company.

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  4. Polemic () says:

    Thank you, Kimble

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  5. Kimble () says:

    Touche.

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  6. ChickenLittle () says:

    How long before Petabyte enters every day language?

    Or Datafarm?

    Quote of the day on this –

    ‘Google,my favourite near monopoly’

    Its gotta be a good thing. Right?

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  7. err.. () says:

    I can’t be the only person who liked Google Video better. Between the lighter interface (=less wait time when bandwidth is already stressed by having other videos buffering) and the ability to download videos in formats other than .flc (and with the audio properly in sync with the video) I thought it was clearly superior. YouTube just has more teenage girls dancing around their bedrooms.

    Oh yeah, this is DPF’s blog… sorry I spoke!

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  8. Zippy Gonzales () says:

    Two things preclude a Kiwi-type YouTube innovation. Crappy bandwidth and exorbitant domestic server space prices. It would be really good, for example, to be able to say to Google:

    “Hey, you want less government intrusion into your business? Why not move your operations to NZ? Bring your Head Office and everything. We have no Department of Homeland Security to hassle you for search data.”

    But there’s no way that could happen, because we just don’t have the capacity to deal with that sort of scale. Can you see 200 terabytes of data working through NZ’s internet plumbing daily?

    There is a possibility that someone in NZ thought of the YouTube idea first, but lacked the resources to give it a blat. NZ is left with rare examples of low-bandwidth goldmines such as TradeMe to work with. Or Ferrit.

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  9. Keith () says:

    “YouTube just has more teenage girls dancing around their bedrooms.”
    And more jihadist promotional videos and censorship of those who disagree with them.
    Google is the perfect buyer, since they’re also biased and dishonest about which news sources they quote in Google News.
    Doubt it? go here and have a look:
    http://michellemalkin.com/

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  10. brian_smaller () says:

    Just a shame that like most people in the west they cave into jihadism though. They remove anti-jihadi videos but leave the most vile, hate filled and racist jihadi stuff online.

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  11. sonic () says:

    Poor Michelle, her p*sspoor videos are not on youtube, what a shame.

    of course she does haev here own site and her own video stream (the vent) but nothing seems to stop her moaning.

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  12. side show bob () says:

    Youtube does work so great here. Takes 10 mins to watch 2, waste of bloody time.

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  13. Keith () says:

    Sonic misses the point entirely, as usual.
    Did you actually look at the evidence, sonic or were you simply unable to resist babbling inanities?

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  14. edt () says:

    Aside from the distribution deals Google is developing to stream music videos etc on YouTube, isn’t it a giant copyright law suit in the making, given the blatantly pirated material people post?

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  15. ChickenLittle () says:

    Edt – Youtube has already got deals with four of the big five record co’s. Just SonyBMG to go, I think.
    Those companies realise they are better off doing deals with content providers like Youtube rather than trying to sue.
    I’m fairly sure you will see copyright deals flying thick and fast in the next year or so.
    One of Googles many strengths is that it has experience in this area through its ebooks etc.

    Google paid 1.2% of its market cap for Youtube and its stock rose 2% yesterday. Nice Huh.

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