This document summarizes a case study about YouTube. It discusses that YouTube was founded in 2005 by Steve Chen, Jawed Karim, and Chad Hurley. It quickly became the fastest growing website and by 2006, 100 million videos were streamed per day with 65,000 new videos uploaded daily. Google acquired YouTube in 2006 for $1.65 billion, which was justified by YouTube's potential to generate $400 million in annual revenue from advertisements. The acquisition also helped Google address issues around copyrighted content distribution on YouTube.

1. Case Study on ?
By: Sunil Kumar
August 1, 2007

2. Youtube- Video sharing site.
Founded by
• Ched Hurley (Left)
• Steve Chen (middle)
• Jawed Karim (right)

3. Table of content
• Dates and figures.
• Facts about youtube.
• Factors which made youtube a hit.
• Launch and Marketing strategy.
• Exit analysis.

4. Dates and Figures.
• Founded on 14th February, 2005.
• Launched its product in May 2005.
• Got their first funding of $3.5mn from
sucoia capital in October 2005.
• Got the second phase of funding of $8mn
from sucoia capital in April 2006.
• Acquired by google in $1.65bn in October
2006.

5. Facts about Youtube..
• Fastest growing website in internet industry.
• On average 100mn videos streamed per day.
• 65,000 videos are uploaded daily.
• You tube has 45 terabytes = 45,000 GB of
videos
• More then 13 million new users every month.
• An average user spends 30 min on you tube

6. Facts about Youtube..(contd)
• 58% of internet videos are watched on you tube.
• 4th most visited site of the world.
• Accounts for 10% of total internet traffic.
• $1mn per month is the cost of bandwidth needs
to support such a heavy traffic.
• The total time people spent watching Youtube
since it started till it was acquired was 9,305
years.

7. Key Issues in video sharing.
 Lack of viable storage Youtube - Right
platform technology at the right
 Mediocre watching time.
experience.  Videos are encoded in
flash format.
 Fragmented viewer
 Tagging of videos
experience. made it more
searchable.

8. What are the other factors which
made the company a big hit?

9. 1.) Widget Marketing:
• You tube allowed user to embed video on their
own webpage or blog.
• It was popular in social networking sites like
MySpace which indirectly increased the page rank
of videos in google search.
2.) Distribution of popular content:
• Popular television clips and hard to find video clips.
• Saturday Night Live
• User uploaded copyright content.
• No registration required and no player need to
download.

10. 3.) Right technology for the desired user
experience:
• Videos encoded in flash format.
4.) Environmental factors:
• Bandwidth become cheaper, faster and ubiquitous.
• Online social networks like myspace had already
attained critical mass.
• Video producing technology become more cheaper
e.g digital camera, mobile phone with camera.
• People seeking online entertainment source.
• Platform side technology become cheaper.

11. Launch and Marketing strategy.
 Launched in May 2005:
• Launched as video clone of HotOrNot.com
• Targeted mainly young adult market.
 Revamped in June 2006:
• Creating a general purpose video sharing site.
• Increasing number of views by offering related
content.
• Interaction between users.
• Offering a video player which could embed on a
site like myspace.

12.  Promotional tactics which proved
ineffective:
• Advertisement on craiglist.com
• Asked women model to upload their videos.
 Tactics which actually helped to increase
the user base:
• Myspace :Although it blocked youtube once but
had to allow it later.
• Tsunami footage videos bought the largest traffic
spikes.
• Distributed i-pod nano for few months to attract
users which results more then a million views per
day.
• Search engine optimization.

13. Exit Analysis
• You tube was acquired by Google in
$1.6bn.
• Sequoia, who invested $11.5mn in two
phases has 30% stake in you tube which
worth around $495mn.
ROI = 43x
• Ched Harley (CEO) got $345.6mn
• Steve Chen (CTO) got $326.2mn
• Jawed Karim got $64.6mn

14. Was $1.6bn acquisition justified?

15. You tube potential revenue.

16. You tube is wildly profitable.
 $7.5mn/month
revenue from ads.
Next target?
 = Nearly
$100mn/year
$75bn tv adv
industry.
 Could go up to
$400mn/year

17. What else did youtube brings to
google other then business?
Issues Actions taken
• Copyright content • Google has almost
distribution issue. developed copyright
• Viacom sued google content filtering
for 1bn system
• Google removes the
content after the
owner claims for
copyrighted content.

18. Thank you