First Mover Advantage bites back yet again--aka; The Revenge of the Liebowitz--as Google gives away its product and tries to make it up on volume:
"We bought YouTube because of the traffic and because of the community," Google Chief Executive Eric Schmidt told investors at a San Francisco conference earlier this month.
The site was losing gobs of money, but that didn't bother Google. Traffic was climbing, and still is. Since the deal, YouTube's audience has grown 40 percent. According to comScore Media Metrics, YouTube's 136 million monthly visitors made up 18 percent of the global Internet audience in January.
One definition of an Internet URL is "Ubiquity first Revenue Later," Schmidt joked at the Bear, Stearns conference.
But the joke could end up being on Google, which paid $1.7 billion for YouTube's URL on the bet that it could turn reruns into revenue.
....Meanwhile, YouTube is still groping for an effective business model.
....YouTube in 2006 sold less than $15 million in ads, according to a recent filing with the Securities and Exchange Commission — not enough to cover the site's bandwidth costs, as calculated by outside experts.