YouTube, LLC is a video sharing website where users can upload, view and share video clips. YouTube was created in February 2005 by three former PayPal employees.In November 2006, YouTube was bought by Google Inc. for 1.65 billion dollars, and is now operated as a subsidiary of Google. The company is based in San Bruno, California, and uses Adobe Flash Video technology to display a wide variety of user-generated video content, including movie clips, TV clips and music videos, as well as amateur content such as video blogging and short original videos. Most of the content on YouTube has been uploaded by members of the public, although media organizations including CBS and the BBC offer some of their material via the site.
Unregistered users can watch the videos, while registered users are permitted to upload an unlimited number of videos. Videos that are considered to contain potentially offensive content are available only to registered users over the age of 18. The uploading of videos containing defamation, commercial advertisements, copyright violations and material encouraging criminal conduct is prohibited by YouTube's terms of service.
Company history
YouTube was founded by Chad Hurley, Steve Chen and Jawed Karim, who were all early employees of PayPal. Hurley studied design at Indiana University of Pennsylvania, while Chen and Karim studied computer science together at the University of Illinois at Urbana-Champaign.
According to a story that has often been repeated in the media, Chad Hurley and Steve Chen developed the idea for YouTube during the early months of 2005, after they had experienced difficulty sharing videos that had been shot at a dinner party at Chen's apartment in San Francisco. Jawed Karim did not attend the party and denied that it had occurred, and Chad Hurley commented that the idea that YouTube was founded after a dinner party "was probably very strengthened by marketing ideas around creating a story that was very digestible."
YouTube began as an angel funded technology startup, with help including a $11.5 million investment by Sequoia Capital between November 2005 and April 2006. YouTube's early headquarters were situated above a pizzeria and Japanese restaurant in San Mateo, California. The domain name www.youtube.com was activated on February 15, 2005, and the website was developed over the subsequent months.The choice of the domain name www.youtube.com led to problems for a similarly named website, www.utube.com. The owner of the site, Universal Tube & Rollform Equipment, filed a lawsuit against YouTube in November 2006 after being overloaded on a regular basis by people looking for YouTube. Universal Tube has since changed the name of its website to www.utubeonline.com.
YouTube offered the public a beta test of the site in May 2005, six months before the official launch in November 2005. The site grew rapidly, and in July 2006 the company announced that more than 65,000 new videos were being uploaded every day, and that the site was receiving 100 million video views per day.According to data published by market research company comScore, YouTube is the dominant provider of online video in the United States, with a market share of around 44 percent and more than five billion videos viewed in July 2008. It is estimated that 13 hours of new videos are uploaded to the site every minute, and that in 2007 YouTube consumed as much bandwidth as the entire Internet in 2000. In March 2008, YouTube's bandwidth costs were estimated at approximately $1 million a day. Alexa ranks YouTube as the third most visited website on the Internet, behind Yahoo! and Google.
In October 2006, Google Inc. announced that it had acquired YouTube for US$1.65 billion in Google stock, and the deal was finalized on November 13, 2006.Google does not provide detailed figures for YouTube's running costs, and YouTube's revenues in 2007 were noted as "not material" in a regulatory filing. In June 2008 a Forbes magazine article projected the 2008 revenue at $200 million, noting progress in advertising sales.
In November 2008, YouTube reached an agreement with MGM, Lions Gate Entertainment and CBS which will allow the companies to post full-length films and television shows on the site, accompanied by advertisements. The move is intended to create competition with websites such as Hulu, which features material from both NBC and Fox.
