YouTube chief an IUP success story
INDIANA, Indiana County -- YouTube.com co-founder Chad Hurley knew his venture was a success when videos watched on his Web site hit 1 million a day.
But he really understood the power of YouTube when Microsoft Inc. founder Bill Gates, the world's richest man, last year referred to the new Internet site at a conference.
"He told the audience that morning he was going to go on YouTube and look for himself. ... That's when I realized we were successful," Hurley said Friday.
The CEO of YouTube is being honored this weekend at his alma mater, Indiana University of Pennsylvania, as one of 10 Distinguished Alumni Award winners. He grew up in Birdsboro, outside Reading, Berks County, and attended IUP to pursue two passions -- art and cross country/track.
A member of the Class of 1999 with a degree in fine arts, Hurley is being feted for his "extraordinary and momentous entrepreneurial success in business and technology," according to IUP. He participated in three question-and-answer programs open to students, local residents, reporters and the general public.
Most people yesterday, though, were just plain curious about the 29-year-old Hurley -- who in 20 months went from founding YouTube to starting the service, to sharing in a $1.65 billion buyout by another Internet wunderkind: Google Inc.
Hurley, Steve Chen and Jawed Karim in February 2005 co-founded YouTube, where everyone can have three minutes of stardom for free. The trio previously worked for PayPal, an online payment service owned by eBay Inc., the online auction site. Hurley designed the PayPal logo, which the company still uses today.
Hurley, who is also YouTube's chief creative officer, was paid about $345 million in Google shares, Chen about $326 million and Karim, some $64.6 million. Sequoia Capital, the startup's sole venture capital backer, received stock valued at $442 million.
Hurley and Chen still are together; Karim is a student at Princeton University. Although the three are known to have worked on developing YouTube, Hurley only mentioned Chen at one of the IUP question-and-answer sessions yesterday.
Since the acquisition in October, YouTube proponents have been concerned that Google's ownership might prove to be a detriment to what's known as an edgy, raw, funny, sad and sometimes just plain-dumb place to watch millions of videos.
YouTube slowly is integrating advertising onto its site and has begun paying some filmmakers for new content.
"The integration of ads is going well, but we're going slow," Hurley said. "We don't want to overwhelm the customer with ads."
Thus far, whatever YouTube is doing has been working
In January, some 48.7 million people streamed video on YouTube, and the Internet darling carried 992 million video streams during the month -- 13.7 percent of the 7.2 billion videos streamed nationwide, according to data from Comscore Media Metrix, which tracks Internet usage.
Hurley told his IUP audience that flexibility and listening to consumers are keys to success for San Mateo, Calif.-based YouTube.
"When we first started out, we were trying to move in an auction direction because we had experience at PayPal with eBay," Hurley said. "But the site didn't get much traction, so we quickly changed it. Customers saw it as a way of communicating and viewing videos."
There were many acquisition offers early on because of the site's quick growth. Still, "we wanted to see how far things would go, and we wanted to go public," he said, but "we needed resources to grow."
Although the YouTube partners at first considered just using Google's advertising system, they eventually realized the two companies would fit together well, partly because they had a similar work culture. And the YouTubers had friends already working for Mountain View, Calif.-based Google.
YouTube, though part of Google, maintains its independence.
"Every day they send us free food -- a great way to keep people," Hurley said, referring to Google. "And if we need anything, I just send an e-mail to Eric (Google CEO Eric Schmidt), tell him we need something, and he sends us stuff."
Most licensing deals thus far have been with smaller media companies, though Google is working to get major studios and networks to put their video on YouTube. Larger players have been somewhat resistant and worry about contributing to what, in effect, might be a growing competitor.
That's not to say that competitors aren't trying to imitate YouTube.
This month, News Corp. and General Electric Co.'s NBC Universal announced a joint venture to create their own online video site.
Google also must handle lawsuits from video providers claiming they have been harmed financially because their copyrighted material wound up on YouTube. Viacom has filed a suit asking for $1 billion in damages.
Asked what's the next big thing in technology, Hurley quipped: "I know, but I'm not going to tell you." He then said technology will forge ways to provide more services to better connect people.
"We were just working on some video problems, trying to simplify a problem for people, and it worked out for us," Hurley said.
