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How YouTube Became This Big

Updated on October 30, 2015

No matter what kind of video you need to watch, you have probably gotten used to going straight to YouTube to look for it. From music videos to documentaries, from informational how-to videos to random, senseless ones, YouTube has become part of everybody’s daily browsing routine.

When you think about it, YouTube has actually contributed a lot to complete the user’s online experience. Try asking people around you and everybody will probably tell you that they can’t even imagine how it was before YouTube came along.

How YouTube was Born

YouTube started out the same way a lot of other start-up businesses started – in a garage. Founded by three PayPal employees Chad Hurley, Jawed Karim and Steve Chan, they activated the domain on Valentine’s Day of 2005 and started making history. The very first video was uploaded on the site in April 2005 and was entitled “Me at the Zoo” which features Jawed Karim and his trip to the San Diego Zoo.

They received funding in November of the same year with Sequoia Capital investing $3.5 million in their venture. Former PayPal CEO Roelof Botha also saw the great potential of the project and joined the YouTube Board of Directors. The site experienced a sudden surge of popularity on its first few months alone, which prompted Sequoia and Artis Capital Management to put in more money into the growing platform, adding $8 million to their initial investment.

How YouTube Grew

July 2005 saw the start of continuous improvements on the site, making the viewing experience even better. The top videos page was introduced, sending users scampering to find ways to send their uploaded videos on top of the list. By August, the rating system was added, allowing people to rate the videos that they view. In October 2005, users were allowed to build their own playlists and have people subscribe to their channels. This was also the time when the full screen view was introduced.

When 2006 entered, more exciting things were brewing inside the YouTube headquarters. Users were allowed to personalize their profiles in February and by March, a 10-minute video limit was set. Users were allowed to send video responses and were finally allowed to upload videos through their mobile phones.

More than a year after it was launched, over 65,000 videos were being uploaded to YouTube on a daily basis, with over 100 million views each day. One of the fastest growing sites at the time, it was ranked fifth among all the websites in terms of the pace at which it was growing. With over 20 million people visiting the site each month in 2006, YouTube finally landed a partnership with NBC in June of that year. The partnership focused on marketing and advertising.

How Google Bought YouTube

With the huge amount of success that YouTube got at such a short span of time, it was not a surprise to see industry giants rushing to have their share. Google announced that it was buying YouTube in October 2006 for a total of $1.65 billion in stocks. This announcement was made in the middle of YouTube’s efforts to escape a barrage of lawsuits, all of them on the grounds of copyright infringement. The acquisition was finalized in November, with YouTube still having the liberty to operate independently, although all founders and their employees would already be part of the Google pipeline.

When Google filed their SEC in February the following year, it revealed each player’s profits from YouTube. Artis Capital Management had shares valued at over $783 million, Seqouia Capital at over $446 million, and Chad Hurley ranking third with over $395 million all in all. Steve Chen had over $326 million while Jawed Karim had over $64 million.

How YouTube Continued to Grow

With Google’s acquisition, YouTube grew even bigger than ever before, consuming the same amount of bandwidth as the entire internet usage of the year 2000. By June of 2007, versions of YouTube in different languages became available to users all over the world. 2007 also saw the birth of the YouTube Awards, which was a recognition for the best videos uploaded on the website based on viewer’s votes. In July and November of the same year, YouTube partnered with CNN in producing presidential debates on TV, with the questions being fielded submitted through YouTube.

By 2008, other websites like Hulu started showing material from Fox, NBC and Disney. With this, YouTube closed a deal with MGM, CBS and Lions Gate Entertainment which allowed them to post films and TV series with matching advertisements. This entire section was called “Shows” and was only available for US viewers. That same year, YouTube was recognized for embodying and promoting democracy and was given a Peabody Award.

In November 2009, a version of “Shows” was offered for viewers in the UK. Like everything else that YouTube did, it was immediately a huge success with over 60 partners and about 4,000 full-length shows featured in the channel. In December of the same year, YouTube became part of Entertainment Weekly’s end-of-decade best-of list.

2010 showed even bigger potential with the number of new features launched. In January 2010, YouTube offered users in the US, the UK and Canada the chance to rent films online, with over 6,000 films to choose from. In March, YouTube also allowed free streaming of major events and similar content such as the Indian Premier League. By the end of that month, YouTube went through a makeover, with a new design that simplifies the entire user interface.

By May 2010, YouTube was streaming over 2 billion videos each day, which grew to 3 billion by May 2011. By January 2012, YouTube was streaming up to 4 billion videos per day.

By October 2010, Chad Hurley decided to step down from his post as CEO but would remain as an adviser. Salar Kamangar, Google’s 9th employee, was to replace him. He was eventually replaced by Susan Wojcicki in February 2014.

December 2011 saw the birth of yet another change in appearance as it was made to appear similarly to social networking sites, with video channels posted on a central column just like the Facebook news feed. The logo was also altered slightly—the first change since 2006.

By the year 2012, YouTube has reached 800 million unique users each month. By the end of that year, a new design that is very similar to its mobile version was launched. “Gangnam Style” also became the first and only video to pass the mark of 1 billion views at around the same time.

Today YouTube still goes through a lot of changes and continues to gain viewers and users. Especially with its localization system where local versions of the website became available to a number of countries, the website has become even more accessible and appealing to use for people all over the globe. Aside from being a proven marketing and informational tool, YouTube appealed to the side of each person that hopes for their 60 seconds in the spotlight, giving them the channel to do so. It has become useful in more ways than one that it has become a regular part of the online scene. In fact, it has remained in the third position in the list of most visited websites since 2010, coming after Google and Facebook. Considering the fact that nobody seems to be getting tired of using any of these websites, and nobody seems to be brave enough to challenge them, it looks like they will be holding those positions for as long as they are permitted to do so.

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  • kgmonline profile image

    Geri MIleff 2 years ago from Czech Republic

    @fatboythin: Thanks a lot! So true...

  • FatBoyThin profile image

    Colin Garrow 2 years ago from Kinneff, Scotland

    Amazing how someone can start a ‘small business’ and make millions of dollars in the space of a few years. Fascinating Hub, thanks for sharing.

  • kgmonline profile image

    Geri MIleff 2 years ago from Czech Republic

    Thanks, MsDora! :)

  • MsDora profile image

    Dora Weithers 2 years ago from The Caribbean

    Hooray for YouTube! Great insight by the original owners and we may have forgotten how to live without it. Thank you the history and sequential growth of this great service.