Portals: YouTube is now a verb and an adjective
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How much should it cost to buy the rights to an up-and-coming verb? By Google's estimating when it bought YouTube last week, about $1.6 billion.
Google itself is one of those few companies whose marketplace success is so complete that its name becomes an acceptable synonym for its product. Around the world, Internet users don't search for information, they Google it.
That's close to the situation in which YouTube now finds itself. It's already the mandatory first stop when something happens in the world and you want to see what it might have looked like on TV. It's becoming an adjective, too; this midterm campaign is being called the first "YouTube election" because of the videos that politicians are posting of their opponents' less felicitous moments: using insulting racial terms or falling asleep at important hearings.
Its final triumph as a verb can't be far behind.
Considering the potential of YouTube, Google probably couldn't afford not to buy it. For a company of Google's market capitalization -- $130 billion -- the purchase price, while not exactly immaterial, is the sort of roll of the dice a company like Google needs to take, if only to avoid the equally risky prospect of not taking enough risks.
Consider the upside. Recently, needing to catch up on television coverage of the recent IM-mediated scandal on Capitol Hill, I did what millions of Americans do and tuned in "The Daily Show." But I YouTubed it, going to the site and searching for "Daily Show and Foley." Thus was I able to catch up on the program's take on the affair, which it calls "The Crisis in America's Pants."
Only as an afterthought did it occur to me that I might be able to see the same clips on the Web site of the "Daily Show" itself. It turned out I could, but the site was slower and froze up on me a couple of times.
To cite another company whose brand became a word, YouTube is in the position of becoming the TiVo to the whole world. Who wouldn't pay $1.6 billion for that?
One of the things that could keep YouTube from achieving that potential is for content owners to decide they don't want intermediaries between themselves and their viewers. Already, media companies like Viacom -- owner of Comedy Central and more -- are thumping their chests about the legal action they plan on taking against YouTube for all of the infringing material on the site, like the Jon Stewart clips I saw. Most people think the endgame these media companies have in mind is a licensing deal in which YouTube pays them for the right to use their clips, a step YouTube has made clear it would be only too happy to take.
A better long-term approach for media companies might be to get their viewers out of the recently acquired habit of going to a third party, like YouTube, for their entertainment. Instead, viewers like me should have as their first impulse to check the show's Web site, where our visit can be monetized via advertising just as though we had watched the program on "real" TV.
Getting viewers into that habit means taking video streaming more seriously than many media companies now seem to. YouTube walked the walk with Web videos, spending a considerable amount of time and money on servers and bandwidth to quickly show users their requested videos, though the quality of the image still left much to be desired. By contrast, the video on the Web sites for many media companies seems to just a pretty ornament that doesn't function particularly well, because the media companies don't seem to have the incentive to make it work.
No wonder people prefer YouTube.
One of the striking aspects of the YouTube purchase was the extent it represented a strategic departure for Google. Until now, the company's product story had involved self-proclaimed smart people using their Stanford educations to write elegant and groundbreaking pieces of software that also happened to open up a vast new online marketplace.
With YouTube, though, the company isn't getting any technology to speak of; in fact, YouTube users will probably notice an improvement in coming months in some of the secondary parts of the site, like mail and messaging, which were known for their occasional hiccups and downright outages.
Instead, Google is getting an awesome brand name, and the eyeballs that come with it. It's one of the ironies of the current Internet that success is often uncorrelated with a company's R&D budget or the number of programmers on its staff. As proven with social networking sites such as MySpace, what makes for success is often being in the right place at exactly the time that a particular fad breaks your way.
There are any number of video-sharing sites, contemporaries of YouTube with essentially similar technology offerings, that have spent the last few months wondering how they missed the tidal wave that YouTube caught. Might one extra link, one new video, 12 months ago caused things to tip their way instead of toward YouTube?
The answer to that $1.6 billion question involves the behavior of crowds, something that all the computers in the world put together still aren't able to figure out.
First Published October 18, 2006 12:00 am