YouTube Hulu Face Off

November 17, 2008

Tim Bradshaw’s and Matthew Garrahan’s “Riveal Forecast to Catch YouTube” caught my eye on November 16, 2008. I am not too concerned with user-genrated videos, services that cause Viacom to sue Google for $1.0 billion, and information services that force me to acquire data within the limits of a serial data stream. I spoke with a colleague in Europe early this morning (November 17, 2008), and I learned that the Financial Times story here documents what may be Google’s first head-to-head competitive Web service “loss.” Google has suffered set backs with staff quitting, acquisitions that went aground, and deal like the one with Verizon that stalled. My colleague’s point was that Google bought a dominant Web service and failed to monetize it. Then a traditional entertainment company rolled out Hulu and now seems poised to pull the News Corporation into the Hulu “hoop”. YouTube.com, therefore, may be bypassed or just plain defeated by organizations who know about entertainment and just enough about technology to make the service viable. Is my colleague correct? I don’t know because YouTube.com is based on user-provided content. Copyright hassles aside, the YouTube.com content is quite eclectic. I find it difficult to locate certain videos such as Google’s own talks. YouTube.com is starting to move into iTunes’ territory, but I have my doubts that the costs of supporting the user generated video plus feature films can cover Google’s costs. Companies like NBC Universal and News Corporation have not been able to hit Web home runs. The companies understand popular culture and how to exploit a trend. These traditional media companies have an infrastructure in place to sell ads to agencies using lingo the agencies understand. Take a look at the Financial Times’s article. This might be one of those stories that marks a turning point in a particular market sector. If my colleague is correct, the GOOG may be looking at its first big defeat in online services. I am pro-Google but on the fence in this matter. You can monitor the Google YouTube.com blog at www.arnoldit.com/overflight to keep pace with news in this sector.

Stephen Arnold, November 17, 2008

Written by Stephen E. Arnold · Filed Under Business strategy, Financial, Google, News

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Stephen E. Arnold monitors search, content processing, text mining and related topics from his high-tech nerve center in rural Kentucky. He tries to winnow the goose feathers from the giblets. He works with colleagues worldwide to make this Web log useful to those who want to go "beyond search". Contact him at sa [at] arnoldit.com. His Web site with additional information about search is arnoldit.com.