Internet case study – YouTube

Chad Hurley, Steve Chen and Jawed Karim, who were all early employees of PayPal, founded YouTube.com.
The domain name “YouTube.com” was activated on Feb 15, 2005, and the website was developed over the following months. The creators offered the public a preview of the site in May 2005, and six months later, YouTube made its official debut.
In Aug 2005, Macromedia released Flashplayer 8, which provides a large increase in file quality compared to Flashplyer 7 and had a very small download size, decreasing download time. Using this, for the first time ever, users did not have to have a separate video player (e.g. Windows Media Player, or Quicktime). They could now watch decent video in a web page practically instantly.
The company began in a garage and had a commitment to offering free services. They needed outside financial backing. In Nov 2005, venture capital firm Sequoia Capital invested an initial $3.5 million. In April 2006 they put in an additional $8 million.
YouTube is currently (Nov 2006) one of the fastest growing websites, ranked as the 10th most popular website on Alexa, far outpacing even MySpace’s growth. July 16 2006, 100 million clips were viewed daily on YouTube, with an additional 65,000 new uploads every 24 hours. The site has almost 20 million visitors each month, according to Nielson / Net Ratings, where around 44% are female, 56% male, and the 12 to 17 year old age group is dominant. According to Hitswise.com, YouTube commands up to 64% of the UK online video market.
Oct 9 2006, Google announced they would buy the company for $1.65 billion, Google’s biggest purchase to date. YouTube will continue to operate independently, and the coampny’s 67 employees and its co-founders will continue working within the company.