In a speech to the 2006 ACM conference at the University of Illinois (Karim, 2006), Jawed Karim,one of the founders, explained the background to the development of YouTube.
YouTube was not the first video distribution or video sharing site, but the technology at the time was not easy to navigate. Along with Steven Chen and Chad Hurley, they considered the question “What if there was a video sharing site where anyone can upload videos and anybody can watch videos, would it would anybody use it?" (Karim, 2006). The three registered the company and commenced work in Chen’s garage on 14th February 2005.
Karim (2006) explained that the timing for such a site was right due to the development of secondary technologies:
The first video to appear on YouTube was shot by Yakov Lapitsky at the San Diego Zoo, and uploaded on Saturday April 23, 2005.
Source:http://www.youtube.com/watch?v=jNQXAC9IVRw
references (Karim, 2005)
It was a slow start. None of the partners really understood marketing (Karim, 2006) and as such did not spend much time with the world of marketing (Jarboe, 2009). What they did was to communicate with their users through the YouTube Blog. This interaction with users prompted changes that led to a revamped the site in June 2006. A major change was the inclusion of a “related videos” window to encourage the watching of other similar videos. This was designed to keep people on the site for longer periods of time. They also made it easier for users to share videos with one another. With one click a user could email a link to a favourite clip to all their friends from within YouTube.
But one important innovation was the ability for users to embed video clips into their own websites. This actually extended the reach of YouTube beyond the YouTube web site. This feature became extremely popular in MySpace and was among the reasons that YouTube increased dramatically in popularity.
The founders had not only designed a site where people could easily share videos, but had developed a network of users who provided the necessary feedback to the company for improvements (YouTube Editors, as cited in Jarboe, 2009. p.8). As new people became aware of YouTube, the network grew and became more valuable.
In addition to this, the “related video” window ensured that the site retained the attention of viewers. As more videos were loaded to the site, it would be easy for clip to get lost or at least users could feel a sense of information overload, but the “related video”, meant that longer periods of time were spent viewing. With a simple innovation YouTube was able to retain the attention of its users.
In the period May 2005 to December 2005 the site grew from 30 daily users to over 3 million users (Jones, 2010 p.13). In her thesis Jones attributes some of this growth to an early skirmish with the American NBC network over a Saturday Night Live clip that was uploaded to YouTube to become the first viral video to gain mass popular attention. The media focused on YouTube’s spike in traffic due to this video. According to Karim, this phenomena of having a single video “go through the roof” happened on average once every two weeks, but as the number of video uploads increased, the number of videos that reach these proportions also increased to the point where there are many per day (Karim, 2006).
Sequoia Capital provided initial funding of $3.5million in November 2005 and this was subsequently increasedthis by $8 million fund growth.(CrunchBase, n.d).
YouTube continued to grow by signing agreements with content providers such as CBS, BBC, Universal Music Group, Sony Music and Warner Music Group as well as many others. (CrunchBase, n.d).
In November 2006, a year after its initial launch, Google Inc acquired YouTube for $1.65billion (BBC News, 2006).
