YouTube is a free video sharing platform that is now owned by Google. It is considered to be one of the major applications in social media along with Facebook and Twitter.
It was registered on February 14, 2005, by Steve Chen, Chad Hurley, and Jawed Karim, formerly of Paypal.
The company experience massive growth. It was originally launched to allow people to upload their home videos. Unfortunately, the company ended up fighting many lawsuits over copyright infringement.
YouTube is the second most visited website on the Internet, after Google's search site. It boasts 2.5 billion monthly visitors. This provides a tremendous network effect.
The Early Days
After launch, while still in beta, it was attracting some 30,000 visitors per day. By the time it went live, there were more than two million video views each day. This grew to over 25 million by January 2006.
The number of videos available at the site surpassed 25 million in March 2006, with more than 20,000 new videos uploaded on a daily basis. By the summer of 2006, YouTube was serving more than 100 million videos per day.
Monetizing the website was a problem. As growth occurred, computer infrastructure and storage space increase. This was coupled with the litigation the company was being hit with.
This force the owners to start looking for a buyer.
Sale To Google
Google launched Google Video in 2005 but it failed to attract an audience. The company already had an interest in this genre and YouTube seemed like an ideal candidate.
In October 2006, YouTube was purchased by Google for $1.65 billion in stock.
A new business model was implemented. The site started to generate revenue from advertising. Adsense was also incorporated for certain content creators to allow them to benefit financially from the views on their videos.
As of 2020, YouTube reportedly generated almost $30 billion in revenue for Google.
Expansion
Since its acquisition, Google expanded the platform a great deal.
One of the biggest shifts was the move to mobile. This occurred as the smartphone revolution took off.
Another was to settle lawsuits by entering into partnership agreements with major studios. While much of the content still comes from individuals, there is some that is put together by the traditional movie and television studios.
YouTube also started to offer full length feature films, both as a free service and on a pay-per-view basis.
Finally, the company launched its own "television" service which allows users to get a number of channels for a monthly fee.
Controversy
The company attracted it share of controversy over the years.
Like many social media platforms, it is often targeted for spreading "fake news". Since anyone with a Google account is able to upload content, the company did not screen what was being posted. Outside illegality such as child porn, the platform basically allowed anything.
This got the ire of many up especially as the likes of Alex Jones became popular. His attacks on people started to cause the company to take a harder look at what was being posted.
Here is where the company started to censor content. This led many, especially on the right (politically speaking) to claim they were targeted by the company.
Web 2.0
YouTube is a classic Web 2.0 platform.
It became popular when the Internet started to provide two-way interaction. As social media rose, the users became the content creators. This coined the term "prosumer".
We see the classic business structure as all data is housed on Google's servers. They are in full control of that along with the accounts. This means that users can be removed from the platform for violating the terms of service.
Web 3.0 proponents believe the future is going to see another evolution of the Internet. Whereas today's social media platforms are centralized, the next generation could see decentralization as the common structure.
Under this scenario we see the data housed on distributed networks with nodes that are operated by many different individuals. The data can be accessed by a variety of applications, providing nobody with full control over the system.
At the same time, the users will have account ownership as nobody will be able to close it down.
An example of this is 3Speak which is working on becoming a decentralized video platform similar to YouTube.
Monetization
YouTube is a platform where content creators can be rewarded for their followings. Google provides the opportunity for these channels to sign up to share in the advertising revenue. To quality, one needs to have at least 1,000 followers and had over 4,000 hours of content viewed.
This is a level that very few get to. It is, however, different from other giants like Facebook or Twitter which have no real monetization process for their users. There people just keep feeding data into the databases on the company servers, providing them with a treasure trove to mine and sell to advertisers.