The Founding of YouTube

YouTube is the most popular video sharing site on the internet, with over 800 million unique visitors every month and approximately four billion hours of video viewed monthly.
YouTube is also the second largest search engine.
As a video sharing platform, it enables individuals, groups and even businesses to reach a wider audience at little to no cost by sharing their videos online.
At the heart of its global success is the human need and desire to reach out and share videos they find interesting with others. The vast popularity of YouTube can be attributed its simplicity and ease of use. Anyone with an internet connection can access and even upload a video to YouTube.

Three Friends And An Idea

YouTube was the brain child of three individuals. Steven Chen, a programmer born in Taiwan, Jawed Karim, a computer programmer born in East Germany and the Chad Hurley, a graphic designer. These three individuals met and became friends while employed at PayPal, an online payment system. In 2002, PayPal was purchased by the online auction company eBay, with all employees at PayPal received bonuses as a result of this sale, a fact which would contribute to the rise of YouTube.
There are several stories on how the idea for a video sharing site came about. Apparently, Steven Chen had hosted a dinner party and had digital recordings of it, but could not find an easy way to share them with his friends. Around the same time where were two incidents namely the 2004 Indian Ocean Tsunami as well as Janet Jackson’s famous wardrobe malfunction during her half time performance during super Bowl XXXVIII in February 2004. Although both incidents had been covered by various media outlets, the video footage could not be found online.
The three friends saw an opportunity and decided to capitalize on it. They all contributed some of their PayPal bonus money, with Harley providing his garage space and Chen footing most of the equipment, power and bandwidth expenses using his credit card.

Youtube Goes Live

On February 14th 2005, the trio registered the domain name youtube.com. On February 15th they established a company, YouTube LLC with the motto ‘broadcast yourself’. The first video sharing on YouTube took place on April 23rd, 2005. It was an 18 second video of Karim at the zoo. The trio then set about spreading word about their site. By November 2005, the site had gained some popularity and the trio had a new challenge: financing.

Financing The Great Idea

The equipment they had begun with was proving inadequate as more people were sharing and viewing videos on the site. By this time, Chen had already maxed out his credit cards. He called an old acquaintance from PayPal and asked for assistance. He was referred to Sequoia Capital, a company that helped finance many tech startup companies including PayPal.
They received $3.5 million to help them keep growing. And grow they did. In fact, they grew by leaps and bounds. By April 2006 they needed to expand some more and they approached Sequoia Capital and got $8 million. The money enabled them to move out of Hurley’s garage into a larger office space as well as hire 20 employees. Hurley became the CEO while Chen was the chief Technology officer. Karim, however, decided to go back to school and enrolled in a graduate program at Stanford University.
A notable milestone in YouTube’s history is that in 2005 a video by Nike featuring Football star Ronaldinho was the first video ever to be viewed 1 million times on the site.

Sold!!!

However, as much as the site’s popularity was growing exponentially, it was not bringing in much revenue. The increased traffic meant that a lot of resources were dedicated to ensuring the site had enough bandwidth and data storage. Around this time they also ran into some copyright infringement challenges which were taken care of by creating partnerships and deals with the copyright holders. The company’s startling success was noticed by Google and in October 9 2006, the Company was bought off at $1.65 Billion.
Google had the capacity to turn YouTube into a profitable venture through its Google ads system. As soon as the Tech giant took up YouTube, the rest, as they say, is history.