It’s not the technology, it’s the experience. It’s simple sharing. It’s easy embedding. It’s reliable viewing. It’s “when I share a YouTube video with someone I know they’re going to be able to see it no matter which browser, computer, or OS they have.” That’s what makes YouTube YouTube.
But you won’t hear that from AOL or Microsoft — two companies that were considered YouTube suitors before Google swept in and closed the deal.
What you’ll hear from them are lines like this:
“The AOL guys would’ve loved to have got YouTube. We looked but decided AOL has not only better technology but it’s also in-house,” said Dick Parsons, CEO of Time Warner, which owns AOL.” (source)
“Microsoft evaluated acquiring this type of technology several months ago, and decided to build our own offering, focused on driving better customer and advertiser experiences through integration with Microsoft assets and services that reach an estimated global audience of 465 million consumers,” said spokeswoman Whitney Burk in a statement. “We are excited about the potential we are seeing in the beta of Soapbox on MSN and believe building our own solution is a more cost-effective way to compete in this new space.” (source)
Both AOL and Microsoft take the “we have better tech in-house” stand. That’s why YouTube wasn’t attractive.
It wasn’t that YouTube was overvalued or YouTube has significant legal battles ahead that AOL and Microsoft didn’t want to absorb. It was that YouTube’s technology wasn’t up to snuff.
Never mind that YouTube was streaming millions of videos a day and never seemed to be down. Never mind that YouTube is the leading video viewing/sharing site by a wide margin. Never mind that the public likes YouTube. Never mind that YouTube movies are embedded with Flash which everyone already has. Never mind that nearly every email I’ve gotten from anyone in the past year saying “hey, check out this video” lead to a YouTube video. Never mind that my parents actually know what YouTube is but have never heard of AOLs “technology” or Microsoft’s Soapbox. Never mind any of that. Just mind the technology.
Can AOL and Microsoft beat YouTube down the road? Anything is possible, but they’re making it awful hard on themselves if they think technology is what’s going to win this race. Technology rarely wins the race — experience and execution does. YouTube nailed that. Time will tell if they nailed a few coffins at the same time.
JL!
on 13 Oct 06It’s going to be just about impossible to beat YouTube’s brand (quickly) unless someone can add something totally new and truly useful to the idea.
Alaska Miller
on 13 Oct 06I think this post misses the point:
AOL has Netscape Videos which is actually better technology and implementation of flash videos.
MSN Soapbox is also pushed to quite a large MSN community.
So then why would they refuse to buy YouTube?
Because the price wasn’t right and because YouTube was a complete copyright trap.
Of course Youtube was really popular, but how much of the content on the site were amateur self made and how much of the content were simply copyrighted material? Looking at the top 10 and it’s either an anime video or a Daily Show/Colbert Report or Family Guy.
If that’s the case it becomes apparent why Youtube was so popular. Cocaine is popular too, in fact more so if you give it away for free.
German
on 13 Oct 06Yeah, Napster was really popular too. Great experience, IMHO. We all know what happened there. They’re actually still around, not that much anyone cares anymore.
Chris
on 13 Oct 06Yeah, and Viddler is gonna be even better!
Chris
on 13 Oct 06YouTube was acquired for the community, not for the platform or technology.
Clearly AOL/Microsoft don’t understand that.
Anson Parker
on 13 Oct 06It’s not the technology. It’s not the experience. It’s their critical mass.
This is tired, I know, but look at MySpace. It’s one of the worst engineered web experiences I’ve seen. Building a better experience won’t enable you to beat them any more than better technology will. Early on, a combination of those two may be important to get that critical mass, sure.
But both Microsoft and AOL are established. They already have millions of users. They’re betting they can push those millions towards their own solution the same way that MySpace is going to attempt to do with their own video platform.
Prashant
on 13 Oct 06Ever since the deal there is a cacophony of opinion , every one is busy doing Post Facto Analysis . it was hard to go to a site and not to seea post about it . but here i would like to say Anson Parker’s view is the wisest thing i have come across .
Anson YOu are Right
Anonymous Coward
on 13 Oct 06bn
Joshua Warchol
on 13 Oct 06Interesting post. The new Blog Cabin system seems to be working well. One thing I’m not seeing in the feed anymore is the author. I usually get it via Google Reader. The posts look great there but no author is listed.
Josh
on 13 Oct 06MySpace is the only site that can compete with YouTube in this space short term. TechCrunch had an interesting post shortly before the YouTube acquisition went through that brought up the oft-forgetten (it seems) point that Google has a huge advertising deal signed with YouTube’s biggest competitor, MySpace—a company that vowed to crush YouTube. What I’ve read since indicates that News Corp. wasn’t very happy about Google buying YouTube. It’ll be interesting to see what happens with that.
By the way, nothing about MySpace is about providing a good user experience. I find everything about that site maddening and most of it is a total affront to good design and usability—and yet… MySpace Video might already be bigger than YouTube… hummm.
David Clark
on 13 Oct 06I’m with the first post. This is all about brand and traffic. Google can monitize YouTube better than anyone. Youtube IS the destination right now. It has all of the significant traffic and mindshare for sharing videos. Just like with iPods, second place is more than 50 percentage points behind in marketshare. Google already had/has great video sharing ‘technology’ with Google Video. Did it have even a quarter of the traffic of YouTube? No. Google is an advertizing company. They love putting ads in front of eyeballs. YouTube has the eyeballs. We shouldn’t forget that Google recently paid 900 million for the privilage of placing all the ads on MySpace for just ONE year! They’ll make money on that one year with MySpace. If they are smart, they’ll buy MySpace too. They’ll make money on YouTube too.
Michael
on 13 Oct 06And that’s exactly the reason why I joined.
Muralikrishnan
on 13 Oct 06excellent point by Josh
It is not about the Technology, it is not about the Usability, it is all only about the Community
but, this Community is fickle … MySpace & YouTube are big today, tomorrow … one can’t be that sure ;-)
Al Chang
on 13 Oct 06Well.. It’s not like AOL or MSN could say, “I’m sorry, we’re too hamstrung internally to create a compelling user experience, nor do we own a highly efficient ad engine which monetizes traffic enough to justify a $1.6b acquisition price.”
Refreshing in honesty, even if unlikely in practice.
It also underscores the power of a small company saying “doesn’t matter right now” to 95% of big company concerns (legal, scalability out-of-the-gate, legacy platforms, desire for integration with existing products, etc) and focusing on audience delight. Good timing and solid backing doesn’t hurt either.
Google, to their credit, quickly tested the distribution trumps content theory with a front-page link. Traffic max’d out low, and they opened the wallet. http://weblogs.hitwise.com/leeann-prescott/2006/10/google_youtube_rumor_-_hitwise.html
Technology is still a ticket to play and can give excellent leverage to human efforts. Agreed that a fancy camera does not a Studio 60 or Project Runway make.
Ironically, efficiently wringing cash out of general internet traffic is where technology does matter. It’s also more fashion-proof. AOL/Yahoo/MSN/NewsCorp wasn’t executing on that either.
Don Park
on 13 Oct 06Well, I think it’s more complicated than that. I also think customer loyality for YouTube and its brand power is overestimated by far. Just like TV stations, people will switch the channel to other stations if they offered better ‘experiences’.
I’ve also posted on the subject here:
What can Yahoo do?
Dr Nic
on 13 Oct 06Skype was another example of just another VOIP provider that nailed the:
Result: Skype valued at several billion dollars.
Johan
on 13 Oct 06Google is a seach engine and has google ads. AOL is a portal and Microsoft is what is.
That is the whole issue. Google have the technology to spread the word.
Mike
on 13 Oct 06All I know is that my father, who can barely move files around on his computer via a mouse, knows about YouTube and will routinely watch scenes from Dragonball Z-ish anime while at work.
He is a hotel/retail construction supervisor.
YouTube has mindshare.
No, I have no clue why my dad watches that stuff. So don’t ask.
Jason
on 13 Oct 06“Technology rarely wins the race — experience and execution does.”—sums it up
Look at Craigslist, Myspace, or even Digg, none of these sites would take longer than a few weeks to write, why would they think YouTube would be any different. The technology has become the commodity in these business models, brand and community are much more important.
Nerd Lifestyle
on 13 Oct 06Why would you spend all of that money on something you aren’t even sure you can monetize? That’s why Microsoft and AOL weren’t interested. The comments they made were taken out of context I’m sure. I’m sure they considered the eyeball factor as well as the technology (and by the way, Soapbox is much slicker than YouTube).
YouTube is cool, sure, but what value does it have as a business?
Andrew Kasper
on 13 Oct 06I love this quote:
How a normal person would say it:
Leave it to a huge company (and its spokesperson) to take the idea “Make a Microsoft version of YouTube” and rephrase it with double-talk and non-speak. This reminds me of the Jargon post from not too long back.
Elizabeth
on 13 Oct 06I agree with NerdLifestyle—it’s really about revenue. Microsoft’s “better customer and advertiser experiences through integration with Microsoft assets and services” clearly says, we can make more money if we do it on our own.
Jim
on 13 Oct 06The new blog engine should really do something to obfuscate email addresses instead of using mailto:.. Blog engines do not typically do this because it will be a great place for spammers to farm emails… You should at least have a note that emails are now displayed, i’m not sure everyone is aware of that change.
Adrian
on 13 Oct 06If it’s experience and execution that wins the race rather than technology, why is MS Windows the world’s most popular operating system?
YouTube is great and part of its greatness is its current community. Long term, however, I wouldn’t bet on it staying ahead. The ability of AOL and MS to leverage their platforms and integrate their own services has massive value, even when the overall experience is worse in a head-to-head comparison.
That’s why people are still emailing me Word files.
Anonymous Coward
on 13 Oct 06MSs technology has never been “the best.” MS just executed better. They licensed their product better, they got their OS included on new PCs better, they marketed better. It’s not technology, it’s execution.
Bryan C
on 13 Oct 06Google lets their in-house developers dabble in almost anything, but when it comes to making money they seem to know what they’re really good at: search engines, massive content databases, and context-driven advertising. Other stuff they buy and absorb.
Microsoft is the same way with their desktop software and it’s always been one of their strengths. At the present time they’re less willing (or able) to follow the same strategy on the web. It’s hurting them, or at least slowing them down.
John B
on 13 Oct 06I think that when it comes down to it Google was in the best position to profit from YouTube. They have by far the best contextual advertising engine to monteize the traffic and have plenty of cash and resources to work out the copyright issues, (which are coming along quickly as evidenced by the agreements announced on the day of the aquisition).
With 100 Million videos being served per day and all the pages being served along with them when Google is able to start serving ads with those there’s going to be a lot of cash start rolling in. More than enough to justify the 1.65 Billion purchase price.
Clint
on 13 Oct 06I don’t expect Google to continue buying and building just because they can. I’m betting they will start to work on the integration and simplification of all of their current products.
Chuka Eze
on 13 Oct 06Jason, You couldn’t have said it any better.
David
on 13 Oct 06Speaking of technology. YouTube is encoding their videos in 1994 Flash technology. They use Flash 7.0. All of their competitors are using Flash 8.0 or 9.0, superior technology and quality.
Guy
on 13 Oct 06MSN video actually recommands non-IE users to download and install both the newest IE and newest Media Player, but it’s banners states it’s simple>
“start now!” .. “follow the simple steps below to experience MSN Video”...
The hebrew version of MSN Video even asks users to “click this link” after all applications were installed. – But the user will most likely be forced to reboot and will lose this screen…
screenshots can be found im my blog post about msn video. (self promotion :).
Jared White
on 14 Oct 06I think the only sites that will be able to compete effectively with YouTube are ones that have a different feel, niche, vibe, etc. For instance, YouTube has a lot of garbage on it, with a surprising amount of low-grade amateur porn. Sites like blip.tv that focus more on a clean atmosphere and real video blogs may be able to gain an edge for some people. Other sites may end up focusing on certain “genres” of video.
But yeah, a competely bland/generic competitor like MSN or AOL probably don’t stand a chance.
Chuck Cheeze
on 14 Oct 06I just hope G upgrades the YT backbone… watching a YT video takes minutes for it to reliably stream and usually its stuttery- G video and Vimeo are usually immediate and smooth, no matter the length.
Alex
on 14 Oct 06The reality is: Google now leadering video brodcasting in the world. And the future is the video = video ads or video entertainment. Google since a great step to up more in the internet world.
Best Regards, Alex http://www.top60.com.br/s=/
Eric Lunt
on 14 Oct 06Amen. You nailed it, Jason. I always chuckle when I hear that “technology” line from a company.
David
on 14 Oct 06If GooTube starts putting ads in or around my uploaded videos and not paying em anything, I will be pissed and out of there so fast! Putting ads on GooTube will not be easy without upsetting the current fanbase.
Anyone remember popular websites form the 90’s that were bought for billions? Geocities, Broadcast.com? Same thing here, there will always be a better more popular parties.
Nathan Jones
on 16 Oct 06@David: the benefit of “GooTube” for creators is the potential for more visitors. But if you want control over things like advertising revenue you need a decent videoblogging service like blip.tv. Share advertising, choose your video formats, let fans subscribe with RSS…
Christian Romney
on 16 Oct 06So they are just supposed to run a site that loses millions of dollars a month with no revenue streams because you’ll get pissed and ull your content down? I assume you’ll then pay to host your own stuff, maybe on S3, and let millions of people leech of your content. Let me know how that goes when the first bill arrives. :)
I don’t really agree with the entitlement view, but I don’t blame you for having developed it. It’s Web 2.0 companies’ fault that they have conditioned users to think that they are somehow entitled to enormous chucks of bandwidth and storage for free.
Personally, for all the CPU cycles they spend on transcoding, the massive storage problems they have, the gobs of bandwidth they give away, the reliability of their free service, and, best of all, the ready-made audience they provide I'm more than happy to allow them to drop an ad on the tail end of my videos, and would probably support them by taking a look at some of their advertisers' warez from time to time, provided they met some need of mine. Fair is fair.Martin Westin
on 17 Oct 06I think all the video services out there are missing the point. They are all “dated” even I (one-man developer) have “better stuff in-house”.
I’m not takning about some technical detail, performance enhanser or anything that boring. I am takning about what 36signals are known for. I am talking about the user experiense.
When will the world actuallt start taking the user experience of media content seriously? Who is responsible for interaction design at YouTube? No, no, no… not interaction as in getting around the site. Interaction with and within the video content itself. Is really play/pause, timeline-bar and volume control the best we can do? Didn’t Quicktime player have that 15 years ago? Is that still the cutting edge.
Give me a break. I am sute I don’t need to start detailing how you can take “interactive video” many steps forward. Most people reading this blog are at least decent designer, developers, interaction designers. Just take a minute to think about it and you will get your own ideas.
How do you create interactiona and a “community” around your texts and images? Why don’t you do the same to your video?
Ken
on 19 Oct 06This post is missing the point. The technology isn’t relevant at all. All of the major players – MS, AOL, whomever, could make a video-driven site like YouTube that will work in all browsers, with every OS. That isn’t even a challenge.
Flipper
on 22 Oct 06Google may have really bought access to where the video community lives at the moment. In a year or so they may fragment between the latest raft of community sites, or there may be a new kid on the block that makes YouTube look like your father’s Oldsmobile and the community will shift. “Communities” can be ethereal and often temporary. I think Google knows this and plans to get their monies-worth before the migration begins—a migration that may start with the next pass of the copyright minders.
Ryan Speck
on 25 Oct 06Am I the only person that has constant issues with load times, pages working properly, or the site even running in any semblance of speed?
YouTube is a major annoyance and I’d be glad if another outlet would provide some kind of solution I could use that didn’t involve those assholes at Google.
This discussion is closed.