Case 2 Youtube, Google, and the Rise of the Internet

1.         Internet video during this time period emerged as one of the hottest consumer technologies as an increasing amount of people began watching videos on the Internet. “What Google did for the Web; Google video aims to do for television.” That’s what Google set out to do when they launched Google video in 2005. Google has a competitive advantage of having a large market share, as well as being innovative. This has given them the confidence to approach Various Internet services including Google Video and expect success.

When Google video launched, it allowed people to search captions from TV shows but did not provide the actual video. Three months later they then started accepting user-submitted videos and eventually into video rentals and purchases. It underwent more design changes and was unsuccessful in increasing its share in the online video market to surpass YouTube. I believe Google’s missed opportunity in “Video” was a failure to effectively establish its own niche in this Internet video era to capture market share so that they can use their advertising strategy. Higher traffic would have resulted in higher profit margins as they would have been able to sell more advertising.

2.         The video supply chain emerged on the heels of the acquisition of YouTube as Internet Video emerged as one of the hottest consumer technologies. The research of the viewing patterns of the consumers showed that the most popular types of Internet video were short, user-generated clips, movie trailers, music videos, and news clips. This study also showed that the users infrequently purchased these videos and coupled with the projected growth of the Internet in the coming years, revenue from this traffic would have to come from Internet advertisements.

3.        YouTube’s specialty is on short clips submitted by users and they focused on ways to utilize this traffic from its millions of users. YouTube revenue models included Internet advertising, paid subscriptions, and revenue-sharing with Networks and Music Groups. What they didn’t have was the revenue to be made from TV shows and movies like Apple and Hulu. Other competitors offered high quality video exchange and social media like aspects that boosted traffic to their sites. These all appealed to different users and offering a wide range of services would have made them sort of a one stop shop to end traffic to other sites.