The YouTube Gurus

How a couple of regular guys built a company that changed the way we see ourselves

By John Cloud Monday, Dec. 25, 2006
    • MICHAEL GRECCO FOR TIME

    Chad Hurley, Steve Chen and hundreds of the videos that helped turn YouTube into a sensation.

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    The question is, How do they preserve the site's underground image now that YouTube is merely a bijou in the Google empire? As it happens, Google executives are powerfully aware of this problem, and they are sending outward signals that YouTube will remain independent. Google recently sent a team of facilities people to the YouTube office outside San Francisco to ask how the YouTubers want the place decorated (YouTube moved to the old Gap offices in San Bruno before the acquisition, and they haven't had time to fix up the space). "The direction we were given," Google's facilities manager, Ninette Wong, told Chad in a meeting, "was to really get information from you, Chad--you, the man!--and to understand how to integrate the YouTube brand into the work space ... It's really to kind of keep Google separate from YouTube." With the old start-up frugality still in mind, Chad said that his coders don't need more space to work--"They don't complain"--and that greenery is a low priority because "I hear it's expensive to maintain the plants at Google."

    Google will appreciate his thrifty approach, but it's unlikely that the company knows the extent of YouTube's current independence. In a recent YouTube management meeting I sat in on, Gideon Yu, late of Yahoo! and now CFO at YouTube, told Chad and Steve, "The finance team [at Google] has been pushing me really hard on budgeting, your favorite topic. So what I'm telling them and what I'm telling us are"--he paused--"different."

    A nervous laugh shot through the room, but Yu pressed on: "What I'm telling them is that there's no way we're going to get them any budgetary numbers--that it's just impossible because we have no idea what the integration looks like, blah, blah, blah. And they're buying it, a little bit. But I still think that the 'us' team, here, should put together some kind of rudimentary kind of plan ... even if we don't share that upward."

    To be sure, Google will get some control for its $1.65 billion. YouTube's managers must now report to Chad or Steve and a corresponding Google exec. That prompted Suzie Reider, chief marketing officer, to ask the boys whether she now has two bosses. Without skipping a beat, Steve replied, "You only have to listen half the time." Playful as always, he added that he didn't think he was going to use a Google-supplied BlackBerry that would be fitted with Google's mail and calendar system.

    The biggest threat to YouTube remains potential copyright lawsuits from content providers who could claim that the site--like Napster before it--is enabling thieves. In a recent report, Google acknowledged that "adverse results in these lawsuits may include awards of substantial monetary damages." Mark Cuban, the billionaire co-founder of Broadcast.com has said publicly for months that the potential for legal trouble makes YouTube a bad investment. YouTube has responded by publicizing agreements it has made with media companies such as NBC Universal Television to legally show video clips from, say, The Office. Still, YouTube says federal law requires only that it remove videos when copyright holders complain--not to pre-emptively monitor the site for infringements, which would destroy its spontaneity. If kids can't play sad pop songs in the background of their video blogs, why would they blog at all?

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