YouTube founders Chad Hurley and Steve Chen just registered to sell their stock (read more here). Firstly, this shows that these guys actually did make some money. Up until this point it was a misnomer that they were rich. They merely sold their company, and had stock in the new company, but were ultimately accountable to the shareholders at large.
What does this say about YouTube and Google's relationship? Don't hold me to this, but it says that Mark Cuban was right. YouTube is a great idea, but a bad business venture. The copyright infringement liability is still an unsettled issue, and could potentially wipe out the venture. Monetizing the service is going to be very tricky without upsetting users who are accustomed to the ad-free, streamlined user interface. Not to mention that the videos are of poor quality. This contributes to the guerrilla, viral aspect of the service, but consumers today are obsessed with quality (do you really need 7 megapixels?), and that's something that YouTube does not offer.
So what next? Joost (pronounced Yoe-st) is planning on transforming the internet-TV dialogue by bringing quality video to your computer screen. Quality is something people pay for, not grainy, yet hilarious, four minute videos.
The bottom line- Chen and Hurley cashed out because they realize that YouTube is a Craig's List, not an eBay. It's an awesome service, as long as its free, but you're not going to be making TV off of it. When it's all said and done, Google created a whole lot of buzz with their purchase of YouTube, which makes it a billion dollar press release.
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