YouTube has a social network behind it. That's what Google bought, because to date they have yet to build one of their own.
What a startup can create that a large company cannot steal would loosely be defined as a social network; mind-share among people who believe that your company is the go-to place for your service.
If you have built your service on top of Facebook, it will be very difficult to build your site so that you, and not Facebook, are what your customers thinks of when they think of your product. If it's truly a killer Facebook app, they will likely even be happier with a slightly inferior but fully integrated solution. Because they control the social network, the mind-share, that fuels your app.
Google could have waited until the bandwidth costs and the lawsuits from Viacom ate them alive. Remember, Youtube hasn't even become profitable yet. Google already had a capable clone. They just lacked the community because they were a late arrival.
If Google's Sergey, Larry, or Schmidt were as ruthless as Zuckerberg, I have no doubt that Youtube would have been left to die.
I doubt every other company on that list could have made it successful. Even Google with all its "dark fiber" bandwidth has not been able to make it profitable after 4 years.
Viacom is simply not interested in running a money losing venture, otherwise they would have bought Joost instead of partnering with them. Disney didn't need the Youtube brand when they already invested heavily in go.com back in 1998. Look what happened to Hotmail dominance after Microsoft bought it. And what is Apple's experience with web apps?
Google didn't buy Youtube out of goodness of their hearts. If it wasn't them, I'm sure there was plenty of other companies that were looking to purchase, and I'm sure at least some of them have the necessary resources to deal with bandwidth/legal issues
I never said Google bought Youtube out of kindness.
I said that Google had the option of letting Youtube weaken, and buy them at a discount...or fully letting them die out and have Google Video dominate. Each decision with a different risk/reward ratio. They chose the lowest risk/reward since $1.6 billion is probably a relative drop in the bucket for them.
I'm trying to understand. I think youtube beating google was due to network effects: youtube had enough content that it was hard to displace (it was actually more valuable.) Secondarily, it had mindshare (people knew about it.) Possibly, they "understood user behavior and preferences" better (strlen mentioned this intriguing one), and they used this to make it easier to use (slightly more valuable + massively more adoptable.)
Relentless focus on the above factors (content, mindshare, usability) helped them win - have I missed any?
First mover advantage. Youtube was synonymous with online 'canned' video, google with 'search'.
By parking it under the google brand they may have made a mistake. Another - possibly small - effect of that is that you have two steps before getting to a site, video.google.com, is less convenient than youtube.com, and much less easy to promote as a brand separate from the search portion of the site. Many people read 'video.google.com' the same way they promoted 'images.google.com', as a search engine for online videos (which it now has become, for the most part) instead of an easy way to share your videos with your buddies and the rest of the world.
I don't think it will be possible to quantify this effect, but I notice that microsoft named their search engine 'bing.com' after several tries of doing it as a subsidiary, and that google has not attempted to bring youtube.com under the google domain as the replacement for video.google.com (which still exists), it is now the 'search' arm of google for video, returning youtube.com mixed with other video results, just like what you'd expect.
Thanks! Interesting, a strong brand can be a negative.
Further thought: google video was 'better' in that it had higher resolution videos, and it displayed more of them on the screen at once. While youtube had one low resolution video. It was quicker to load and to run, and more suited to slower machines (perhaps especially mobile phones, whence videos oftentimes came?) Google video has always annoyed me in this sense. I note that now, they've increased youtube video resolution (it's 'better'), and also snipe: upgrade to a "modern" browser. Although understandable, it isn't the path to max adoption, and max. network effects