YouTube Google and the Rise of Internet Video Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

MSN was launched in January 2004 by Microsoft. The soap box technology gives users a friendly sort of experience where there can comment, tag and rate on the videos for interaction and feedback purposes. The soapbox was introduced to give a tough time to competitors, which would play a massive role in the growth of MSN by enabling and engaging people in millions for content experience.

Yahoo

In the beginning, Yahoo video was designed to work as video search engine for users. In the very next year, they introduced a web 2.0 service that allowed users to share upload and tag and they can host their videos on Yahoo. The best thing that gave them a little competitive advantage is that user could share videos through Yahoo mail and messenger. They have been trying their level best to penetrate in the market.

My Space

MySpace has been considered as a new player in the industry and founded back in the year 2003. MySpace is not considered as a video search engine but it is also considered as a social media platform, which allows web profiles, email, music downloads, blogs, chats, instant messaging, groups, social events and live songs sharing. These are all value-added items differentiated by MySpace from other competitors. MySpace is highly user friendly, which gives user a very lively experience. Through the MySpace TV technology, it allows professional video makers to have aggressive protected rights towards intellectual property.

INTERNAL ANALYSIS

Financial Analysis

According to case statistics, the market for online video streaming and advertising was undersized but in last few years, it has observed for some remarkable growth. As per the survey of eMarketer, globally UGC revenues include: photo sharing, online video and social networking that will result in growth up to $8.175 billion in the year 2011 from their previous level of $1.6 billion in 2007. It has been projected that growth rates may rise and fall but it will remain above 40% for the upcoming five years. As mentioned in the exhibit 13, online video was projected to reach the principal share of these fine revenues (U.S. income of $4.1 billion in the year 2011). Other global revenue predications for 2011 ranged in between $1.3 billion to $1.6 billion, with U.S. income predications ranging from a massive amount of $956 million to $1.3 billion. These impressive financial figures reflect a bright future of the industry and marvelous growth can be expected in the upcoming future.

To gain maximum financial benefit Google introduced a program, which would include the advertisements in the YouTube videos. These ads were initially introduced at a very low price of around $20 cost per thousand views. Since, the YouTube was working under the umbrella of Google, so there was no need to report the financial figures separately. There yearly revenue was expected to range between $55.8 million to $450 million. On a monthly basis, it was projected at $7.5 million approximately. The current monthly revenue by the year 2007 was $660,000 on conservative scale at 10 CPM. When CPM reaches 30 so the monthly revenue was expected to increase up to the $9,000,000 and when it reached at 50, so the monthly revenue could reach up to $37,500,000. According to the five years projection data at 10 CPM, the monthly revenue would grow up to $16,500,000 that was a massive progress for YouTube. Similarly at CPM 50, the monthly revenue would reach the $1,050,000,000.

Operations Analysis

YouTube under the umbrella of Google , found quiet aligned in their operational activities. YouTube cost structure was not entirely documented. Their major operating expenses comprised of two main elements, which included employee salaries and computer infrastructure. The computer infrastructure included the network connectivity charges and data center host fees mainly. Their computer infrastructure was out-sourced to the limelight as a data centre. It has been assumed and rumored that the monthly charges that have been paid to the limelight is around $1million to as high up to $4million. To meet more operational excellence, Google might interfere between the relationship of limelight and YouTube. The reason for this interference was that Google hold its computer infrastructure internally and had capacity to manage, host and look after the streaming videos. The employee salaries accounted for $3.6 million a year. Technology wise Google has been an updated place to work on because they were well equipped with state of the art internal computer infrastructure...............................

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