YouTube was born when the founders (Hurley, Chen, and Karim) wanted to share some videos from a dinner party with friends in San Francisco in January 2005. Sending the clips around by e-mail was a bust: The e-mails kept getting rejected because they were so big. Posting the videos online was a headache, too. So they got to work to design something simpler.
In 11 months the site became one of the most popular on the Internet because the founders designed it so people can post almost anything they like on YouTube in minutes. Members, who can comment on videos and set up their own sites on
YouTube, add tens of thousands (or more) new videos a day. Steve Chen points out that "From Day One we concentrated on building a service and community around video. That made us a lot different from the
iTunes and the Googles out there."
However, some users have been posting videos that are still under copyright, without any of the required legal approvals.
YouTube normally does not screen out copyrighted works before they're posted, but they do comply with all such requests. Although this raises potentially thorny problems,
Sequoia Capital is betting on
YouTube, having invested $3.5 million. But skeptics wonder if the startup can balance its surging popularity with the looming legal risks. "I think YouTube is fantastic," said Joanne Bradford, head of sales at MSN and other Microsoft properties. "But five years from now I don't know how they make their money. Their problem is all the pirated content"
.