YouTube, Google’s video subsidiary, celebrated its 20th anniversary this year. With the 19-second video “Me at the Zoo” posted on YouTube by Javed Karim, YouTube’s co-founder, on April 23, 2005, YouTube has grown into a media giant with more than 2.5 billion global monthly active users for the first time in 20 years. Market research firm Moffett Nason also predicted that YouTube will surpass Disney to become the world’s largest media company by sales this year.
YouTube was founded in the wake of the exposure of American pop star Janet Jackson in 2004. At the time, Javed Kareem, who was working at PayPal, was inspired by the fact that many people were looking for exposure-related videos on the Internet and developed YouTube, a website that searches for videos with colleagues Chad Hurley and Steve Chun. YouTube, which developed a technology that could play videos relatively quickly in the Internet environment at the time and grew rapidly at the same time as its foundation, was sold to Google for $1.65 billion in 2006, the year after its foundation.
YouTube did not emerge as a strong source of revenue for Google immediately after the acquisition. YouTube was considered a “struggle” until 2009, with an annual deficit of more than $400 million, but it turned into a profit in 2010 and became a good son. This is why the tech industry evaluates that YouTube would have been difficult to grow like it is now without Google’s support.
Moffett Nathanison estimated that if YouTube were a separate company rather than a subsidiary of Google, its value would reach 475 billion to 550 billion won. This is a 333-fold increase in value compared to when Google acquired YouTube. Currently, YouTube is considered the second most visited website in the world after Google. According to Similler Web, more than 20 billion videos have been uploaded on YouTube as of that day.
YouTube recorded 54.2 billion dollars in sales last year, closely trailing Disney with 59.7 billion dollars. Most of the sales are from advertising. “YouTube has a big advantage for Google,” said Brad Erickson, chief analyst at RBC Capital Markets. “It allows Google to use data from other businesses such as search for ads.”
However, with Google ruled that it has a monopoly in the online advertising market following search, some predict that in the worst case, an order may be issued to Google to spin off YouTube. Earlier last week, a U.S. court ruled that Google has an illegal monopoly in two of the three online advertising technology markets.
SALLY LEE
US ASIA JOURNAL
