YouTube acquisition rumours

January 19, 2006

January 19, 2006

I've been stoked on YouTube since it first went live in February 2005. It's much like Flickr but instead of static photos, people upload, share and tag videos.

You can then link to your videos on blogs, other websites or through email, all without having to deal with the hassle (or expense) of setting up a domain name and hosting account to provide space. What a killer and beautifully simple idea. Not even a year later and now there's YouTube acquisition rumours afoot.

My take? It's about time, because I'm sure they've spent a good chunk of the venture capital investment ($3.5 million) since summer.

Quick glances of their About Us and Help pages don't make any reference to how YouTube plans to make money. Advertising? Perhaps, but banner ads typically don't make you rich.

They've got a big user base and vibrant community, but I imagine their bandwidth and storage costs are enormous.

Was YouTube built to flip? Maybe. If the acquisition actually happens, my guess is that they didn't have much of a long-term business strategy and this was their objective from the onset. Nothing wrong with that in my view. They've executed their plans well and it shows. Good luck to them.