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- unknamed, on 10/12/2007, -6/+87I'll give them 2 Million dollars, my Get Out of Jail Free card, Boardwalk and Park Place, plus three Railroads for it.......mmm, no... not the Railroads
Wait, what game are we playing again?? - TenebrousX, on 10/12/2007, -6/+45Where the hell did they get that figure? How can a site that uses millions in bandwidth fees every month be worth $1 Billion?
- inactive, on 10/12/2007, -3/+36advertising.
But yeah 1 billion seems a little high - mystagogue, on 10/12/2007, -2/+23Flickr and YouTube are very similar.
- iamhumble, on 10/12/2007, -1/+22I bet you yahoo would buy it based on their flickr purchase :-P
- Kamino, on 10/12/2007, -2/+22lol I bet the youtube owners want to "drop it while it's hot" for one reason: copyright lawsuits. 1 billion is not bad for a network that is built on ripped videos (and some lame homemade timelapse videos with guys doing the chair dance)
- merreborn, on 10/12/2007, -6/+26The article this blog post links to speculates 3 prices: $400 million, $600 million, and $1 billion.
Pretty wide margin of error there.
(hah. "Blog" isn't in the digg spelling dictionary.)
Re: "How can a site that uses millions in bandwidth fees every month be worth $1 Billion?"
Ever heard of google? - inactive, on 10/12/2007, -0/+19Flickr's burn rate is a small brush fire.
YouTube's burn rate is the Chicago Fire. - radicaldementia, on 10/12/2007, -1/+17I'll buy it! then it'll be mytube.
now I just gotta find $1 Billion... - shawnblog, on 10/12/2007, -1/+16NBC will buy.
- TenebrousX, on 10/12/2007, -2/+16"a site with huge revenue problems that is completley overrated and something they could build a clone of in 1-2 weeks."
wait, are you talking about youtube or flickr? - alanspach, on 10/12/2007, -0/+14i've never see advertising on You Tube, how do they mak any money?
- gregpc, on 10/12/2007, -1/+13Wow, you'd think someone, somewhere would remember the late 90s.
- inactive, on 10/12/2007, -1/+13Yeah this is *****.
Something is only worth as much as anyone is willing to pay for it. - Lumiras, on 10/12/2007, -1/+12They don't make money. They are almost entirely running on venture capital cash
- chubbymidget, on 10/12/2007, -1/+11Digg group purchase?
Everyone throw in a buck - adam84a, on 10/12/2007, -1/+9I Will...
Do they accept Discover ? - inactive, on 10/12/2007, -0/+8the bubble is getting bigger
- HP844182, on 10/12/2007, -0/+7"We don't really want to sell the website, but if someone gave us 1 billion, they can have it."
- lylepratt, on 10/12/2007, -1/+7The author of the article misses the point. YouTube is worth so much not because of its content or service, but because of the amount of people who use it. Even if they were sued to remove copyrighted material, their core value (20 million users) would still be present. One also needs to consider the different types of so-called copyrighted material present on YouTube. Commercials, for example, are copyrighted, but it would serve little purpose for a company to sue to get commercials removed from the YouTube database because they benefit the owner's purpose.
- calbear81, on 10/12/2007, -1/+7Let's try to do some revenue math: 100mm videos served is not equivalent to 100mm pageviews, as many people probably know, lots of sites outside of YouTube link to YouTube served video. If we assume a basic model of just selling Banners (not touching the video content), and that 85% of what's served is served on YouTube.com, then we can say 85mm/1000 imps = 85,000 * A CPM of $2.50 = $212,500 in revenue per day. Of course, the $2.50 is just a hypothetical rate, it could be lower or much higher, all depends. So theoretically, YouTube has the possibility of generating close to $100mm+ a year in revenues. Now, let's say you had $0 costs, you would still need 10+ years to recoup that investment. Do I believe YouTube can hold a leadership position for the next 10+years? My bets are "no". As much as YouTube has grown it's userbase, it faces competition from Revver and Google Video and Yahoo! Video and so far in the space of online content sharing, it appears that users don't really care who's hosting their media as long as it's accesible and it's' easy to use. You can probably find this by looking at the dozens of sites that are devoted to online content sharing for MySpace like PhotoBucket, etc...
Of course, just my $.02. ;-) - mystagogue, on 10/12/2007, -0/+6Also, copyright law is strange and to YouTube's advantage: hosting copyrighted material is not copyright infringement until the owner of the copyright notifies the host and requests a take-down. YouTube always complies with those requests.
- albrad84, on 10/12/2007, -0/+5A social/community based website that makes money solely from advertising (despite a huge number of users) won't get a billion dollars due to their business model, but rather the access to their customer base in order to lead them to a more profitable product / service. Whether or not they get a billion will depend on the number of companies who need this and will be willing to bid on them.
In fact, I think the whole free with advertising business model (pretty much all the web 2.0 sites) is going to have a major letdown over the next couple years, and with the VC's giving them valuations of $10 million or more, I think you'll see a mini-dot-com-bust (meebo was valuated at around $10 million... are you kidding me?)
The problem is that if these sites intend to grow into a large company, they're going to need a more traditional business model to complement or replace their ad-based one. But if they have no problem staying small, then they shouldn't have many problems.
For example, if I were YouTube, I would get into the business of giving content-providers an easier way to place video-content on their websites. So they could go to ESPN or CNN and do all their video content with non-skippable commercials, and get paid a small fee or % of the ad-revenue. This way, ESPN and CNN don't have to hire a bunch of programmers to do what YouTube already does well. If they don't do it, I'm sure somebody will (Google, MS) - Shinta, on 10/12/2007, -1/+6That would be akward.
- inactive, on 10/12/2007, -0/+4don't forget the evil empire:
AT&T
Verizon
They are trying to position themselves as media companies now to avoid regulation. - calbear81, on 10/12/2007, -1/+5$.10 per video load view? That would equate to a CPM of $100 which is way too high. You can look at rates for current pre-load placements on the news sites and CNET for comparison. On top of that, remember the audience of YouTube, their value should be less than that of a more established site with more 18+, Higher HHI demographics.
- oOLiquidNightOo, on 10/12/2007, -0/+4hotmail was sold to microsoft for $400,000,000. venture capitalists buy traffic, not sites.
- inactive, on 10/12/2007, -2/+6About the bandwith. I notice that most videos I play in YouTube load in their entirety in the first 10% of the video. Given the number of times I stop watching a video after the first 30 seconds (which is fairly often...see: all the YouTube videos that suck), it seems like they waste a boatload of bandwith on stuff people never end up watching. I certainly like being able to jump ahead since the video's loaded, but it's hardly a deal breaker for me.
Also, whenever I switch to full screen, it reloads the entire video even though I think it's the exact same quality, just magnified. These just seem like simple things that could save them huge amounts on bandwith. Not saying it could make them profitable, just that they'd lose less ;-P - jo42, on 10/12/2007, -1/+4Same retard that bought myspace.com for several hundred million.
- noGoodNamesLeft, on 10/12/2007, -0/+3Yeah; but that was back in the dot-com-boom days when people were paying absolutely-fscking-stupid amounts of money for even the most dubious businesses, and the darlings of the industry went stratospheric, then mesospheric, then halfway to Mars. And it was before the valuations did a Wile E Coyote realisation that they were in mid-air with no visible means of support and crashed back to dot-com-earth with a vengeance, wiping out the dinosaurs^w dot-com-craze and everyone in I.T. got put out of work, the end.
It won't happen again.... oh, hang on, it probably will. - masteryoda, on 10/12/2007, -0/+3So users can download episodes of Lost divided in 10 minute clips for free instead of purchasing them.
- dtietze1, on 10/12/2007, -1/+4Doey YouTube actually have a business model now? If not, how can it be worth $ 1 bil.?
OTOH -- if they're serving 100 mil. videos a day and just slapped 2 secs of advertising onto the front of each one, that would be 3 million minutes of advertising estate per DAY. Now THAT'S something that might be worth quite a lot to media companies. - capndan, on 10/12/2007, -1/+4Is it really worth that much? I thought they set the buying price at 1 billion for anyone interested because they really didn't want to sell the company while they thought they could still make a lot of money off of it, or at least do a lot more with it. "They" being the guys who started YouTube. Or was it Facebook that did that?
- dpierce, on 10/12/2007, -1/+4If you buy YouTube with Discover card, you get a CashBack Bonus of 1% of 1 billion = 10,000,000.
- babakshirazi, on 10/12/2007, -3/+6
Not really. Let's do some calculations. Insert 1-2 second ad clips at the beginning of each video for a $.10 each.
100 million videos downloaded daily.
That's $10 million in ad revenue per day
$300 million / month or
3.65 billion per year.
At $1 billion, it is a bargain actually. - mattvogt, on 10/12/2007, -1/+4Sen. Ted Stevens might. We've got to keep an eye on these Tubes.
- betobeto, on 10/12/2007, -0/+3It's 1999 all over again. Hang in tight for the ride...
- deadbaby, on 10/12/2007, -0/+3I bet Comcast (or another big cable company) ends up buying YouTube.
- stomicron, on 10/12/2007, -0/+3Take another look at that article. It says that their visit to Allen & Co. was worth $400 million, since it increased their price expectation from $600 million to $1b. That's were those numbers come from.
Nevertheless, just because the owners are shooting for that price, doesn't mean YouTube is actually worth that much. Somewhat inaccurate, but what else would you expect from the NY Post regarding non-gossip. - Nocturnalis, on 10/12/2007, -0/+3Some of you seem to forget or don't know about broadcast.com. Mark Cuban founded in 95 then sold this to yahoo for 5.4Billion back in the late 90's (97-98). He then went on the buy the Dallas Maverick. Currently youtube seems to be more popular than broadcast.com ever was.
- bennyboy371, on 10/12/2007, -0/+3YT isn't going to be worth anything once most music videos are filtered out. After that, it'll be your source for teen girls dancing to no music, pepsi and mentos, and low quality anime.
Its like paying over 500 million for myspace, then realize that people are slowly moving away from myspace because it sucks. Oh, and not spending any money to renovate it. - Saffa, on 10/12/2007, -0/+3FTA - "Google doesn't have it in its DNA to run a service like YouTube"
I guess the author hasn't heard of Google video? - kimos, on 10/12/2007, -1/+3http://www.google.com/trends?q=youtube%2C+google+video&ctab=0&geo=all&date=all
- looksliketrent, on 10/12/2007, -0/+2Because The Pirate Bay doesn't host illegal content?
- chiatar, on 10/12/2007, -1/+3Given the monthly cost of bandwith that youTube blows through, only a fool would buy that sinking, albeit fun, ship
- kimos, on 10/12/2007, -0/+2Well, for one thing, YouTube is winning...
[edit feature broke link] - mystagogue, on 10/12/2007, -0/+2YouTube isn't just a flash player. Serving up that much data with that kind of performance is not something any ol' website can do.
- stomicron, on 10/12/2007, -0/+2Good points, but the question is *will* buy it, not who *can* buy it.
- FreakingHound, on 10/12/2007, -1/+3well those founder dudes, steve chan, jawed karim, and chad hurley, must probably agree with that price tag.
- daveboudreau, on 10/12/2007, -0/+2There's actually a decent amount of great material on youtube that is very much worth watching and not only that but the most popular videos on youtube are original content: Where the Hell is Matt?, all of Brookers videos, Chad Vader - Day ***** Manager, all good stuff.
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