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Mon, Aug 28, 2006 - Page 11 News List

YouTube is not for sale, creator says

SPECULATION The `broadcast yourself' Web site, which currently shows 100 million videos, has been touted as the perfect add-on for Apple, News Corp and other firms

By Edward Helmore  /  THE OBSERVER , LONDON

Where in the world could a business be valued at US$1 billion on a Monday, and US$2 billion by Friday? On the Internet, that's where.

Both of these valuations, by the way, are highly speculative, and indeed the owner says he has no intention of selling anyway. Remember the parallel world of the fin-de-siecle weightless economy, anyone?

In little more than nine months since it was officially launched, YouTube has gone from unknown Web start-up hosting short video clips to a fully fledged sensation, the hot new star of the free-to-consumer Internet explosion. But neither Google nor Rupert Murdoch's MySpace generated the intensity of attention YouTube has enjoyed in the midst of this, the second dotcom boom.

The service, which currently shows about 100 million videos every day to some 16 million individual users, was apparently valued at a highly speculative US$1 billion at the beginning of last week.

By the end of the week -- after Sony paid US$65 million for far smaller video-sharing site Grouper, YouTube's theoretical valuation had doubled to US$2 billion, according to popular industry Weblog TechCrunch.

Prophets

The self-styled soothsayers of the Internet -- the bloggers -- floated the idea that Apple is the perfect buyer, since millions of video iPod owners need videos for their machines. Others say the perfect match for YouTube is an old, big media corporation looking for ways to reach a computer-literate audience.

At a billion dollars or even at two, the price of YouTube is cheap if it can save the titans of old media from the scrapheap. Murdoch's US$560 million purchase of social networking site MySpace last year transformed him from being characterized as dinosaur of the old world to visionary of the new. But the difficulty of putting valuing YouTube's mix of hype and innovation is self-evident. The company -- with the slogan "Broadcast Yourself" -- has no revenue to speak of and isn't the only video-sharing service. But it is certainly the most talked-about.

Maximum control

Unlike conventional TV, it gives users a high degree of control to watch and broadcast whatever they want and, crucially, is not a part of the mainstream media. But users are tricky -- they are not willing to pay for content and are by nature resistant to advertising.

Anyone with a personal computer and video camera can now be a broadcaster on YouTube. The company calls it "clip culture" -- snack-sized videos on-demand. Typically, these are short home-made, comic videos. There are also thousands of music videos, TV clips, news footage -- anything so long as it is not pornographic or overtly abusive.

As Apple did with iTunes, YouTube has recognized that music is the fastest and easiest way of building an audience.

"What we really want to do is in six-to-12 months to have every music video ever created up on YouTube," said Steve Chen who, with Chad Hurley, founded the company last year after discovering a way to upload videos from a dinner party.

Late last week, Paris Hilton launched the video single from her debut album on a special YouTube channel. In a twist, News Corp paid to advertise a new TV series next to the video of Hilton cavorting in the surf, producing revenue shared between her label, Warner Brothers, and YouTube.

The arrangement appears to be a success -- within days, Hilton's song had been watched a million times and her album is climbing the charts.

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