News: The buzz over YouTube continues. I’ve already chronicled the past week’s stories in Forbes, The New York Times, The Wall Street Journal, and even Saturday Night Live. This week’s Newsweek also contains a story, entitled “The Battle over YouTube.”
Tech reporter Brad Stone asks: “The video-sharing site is the hottest start-up since Google. Is it worth a billion dollars, or is it just another company in need of a business model?”
Stone’s article is well worth a read. He identifies the 2 major challenges for YouTube: (1) handling the copyright issue over unauthorized use of copyrighted content in a way that satisfies the media industries (or at least avoids crushing liability), and (2) developing a sustainable business plan amidst an ever competitive field of video sharing sites.
Analysis: I found the most revealing part of the article, the opening paragraph. Stone reveals just how small the physical operation of YouTube is:
“Warner Music, the fourth largest music company in the world, has every reason to wage business and legal warfare against popular video-sharing site YouTube. The Internet upstart gives its 34 million users free access to songs and videos from the label’s entire stable of artists, including Madonna and Green Day. But instead of hostility, Warner digital-strategy exec Alex Zubillaga says he felt something like sympathy during a recent dealmaking visit to the firm’s Silicon Valley headquarters. YouTube’s 60 employees—who share a grand total of 10 landline phones—are so crammed into small offices over a pizzeria in downtown San Mateo that Zubillaga says, ‘I almost felt bad for them.'”