YouTube CEO Chad Hurley – the man of the moment on the Web – was at the AlwaysOn Stanford Summit conference where he talked about how the video-sharing company is making revenue, creating a new advertising platform and building a sales team. For YouTube fans, this will mean the appearance of banners, sponsorships and contests. The trick for YouTube will be retaining the user experience while trying to introduce a bigger commercial element. My column in today's Financial Post (subscription required) looks at the video frenzy and how investors are piling on the bandwagon. It is an environment reminiscent of the e-commerce rage during the dot-com boom where dozens of start-ups of auction sites were launched to compete against eBay. At the AlwaysOn conference today, Kleiner Perkins partner Vinod Khosla made an excellent point relevant to the video industry when he talked about how home-run VC investments happen in markets that can be out of favour (i.e. investing in Infinera in 2001 after the telecom boom ended) and new markets where you're not trying to “create something better than other companies” (see the video-sharing industry).
Update: The San Jose Mercury has a story on YouTube and how it plans to stick with short video clips rather than streaming movies (a good strategy if you want to avoid the sticky issue of copyright violation, although I suspect if NBC wants to pay YouTube to stream a few episodes of a new show, Hurley will glad take it.)
The Crowdsourcing of News?
For all the talk about the impact of the Internet on journalism and how news is collected, packaged and delivered, NewAssignment.Net is attempting to put a new and fascinating spin on things. Simply put, it aims to get the public more active into the news process with money, ideas and reporting (sounds a lot like crowdsourcing). Here's Jeff Jarvis' description:
"The public will come to NewAssignment.net with story ideas and will collaborate on honing them there. Once assigned by NewAssignment’s editors, the public will contribute both money and reporting to the work that reporters are paid to do. The process is open and the public will have a strong voice and role in the journalism NewAssignment does. Editors will supervise the assignments and the reporting and will edit the stories, assuring that NewAssignment produces quality journalism and also that it is not overtaken by a pressure groups."
It sounds lofty, idealistic and ambitious, fascinating and, frankly, difficult, for a journalist to really get his around how it will actually work. The project, which is being funded in part by Craigslist's Craig Newmark, comes across as, well, interesting on paper but we'll see how it really works in practice given it's an entirely new way of doing journalism. For one, how can the public contribute money and not expect to have their interests reflected in the final product? Will the editors be that pure and objective that can resist the reality their work si being financed by the people submitting their assignments? I'll have some more thoughts later some more "perculation" time.
Update: Frank Barnako has his doubts about whether NewAssignment will fly, while Mathew Ingram (a print hack like me) is intrigued but not sure it's going to work. By the way, another intriguing media development is Time-Warner's decision to suspend the print publication of Teen People, while putting more resources into TeenPeople.com. It's another sign young people are consuming media on the Web rather than via print. This should be a huge wake-up call for the magazine and newspaper industry.
Canadian Online Advertising Shows Growth
Is the Canadian online advertising market finally showing signs of dynamic growth? According to the Interactive Advertising Bureau of Canada, the market grew 54% last year to C$562-million from $519-million $364-million in 2004. Before anyone gets too excited, it is important to remember the U.S. online advertising market last year was $12.5-billion so Canada is nowhere close at the traditional 10:1 ratio used when comparing the two markets and their respective populations.
You're Not Funny, Amanda
Not to pound on the Rocketboom soap again but Amanda Congdon's newest video blog is not funny and kind of sad. It makes you accept the reality Andrew Baron is Rocketboom's creative muse while Congdon was just the talent who was embraced by love-lorn bloggers.
Mysterious Broadband Start-Up Raises More $$
Nothing like a good summer mystery, right? Zeugma Systems has raised another $2.25-million to close its first financing round at a sweet $15.75-million. So what's the Vancouver-based start-up going to do with the cash? Well, they're not telling. In fact, they're not even disclosing what they're working on other than a system, which won't be ready for at least another year, for “next-generation broadband networks” that will be used to TV, video and VoIP. The latest cash injection came from BDC Ventures (aka the Canadian government), Zeugma executives and staff. Existing investors include Granite Ventures, Ventures West, Yaletown Venture Partners and GrowthWorks Capital. Zeugma expects to raise another round of private equity later this year. Zeugma's press release can be found here.
Update: Zeugma was recently named as one of LightReading.com's top 10 start-ups.
Kazaa, Skype….Venice?
News flash: Internet rebels Niklas Zennstrom and Janus Friis are apparently moving into the video business after wreacking havoc on the music and voice businesses. According to BusinessWeek, the dynamic duo are using some of their eBay dollars to develop video distribution technology code-named "The Venice Project" (which sounds like a film that Matt Damon would star in). I realize this is the year of video but is anyone doing anything other than video these days? Then again, it's hard to look at YouTube's 100-million video deliveries a day and not believe there's gold in them thar fields – especially when the company has apparently targeted $1-billion as its take-out price.
 The challenge facing most (all?) video start-ups, including YouTube, is turning all those downloads and streams into revenue. Sure, this is a theme I've hammered on before but you can't turn cool Web-based technology into a business without revenue. If you examine Zennstrom and Friis' entrepreneurial track record, Kazaa was not a business but a way to download music and video for free while driving the music industry crazy. Skype was on its way to becoming an interesting telecom business before eBay stepped in with a $4.1-billion takeover. As for "The Venice Project", your guess is as good as mine about its prospects. There's plenty of competition but Zennstrom and Friis has three major weapons in their arsenal: lots of personal cash, plenty of VCs likely chomping at the bit for a piece of the action, and the relationship with eBay. The big question facing Zennstrom, Friis and the boys over YouTube is whether they can attract another Skype-like mega-offer.
Update: Other signs of the video-craze include the launch of Dabble and Gotuit. John Battelle has a post on why YouTube isn't worth $1-billion.
 The challenge facing most (all?) video start-ups, including YouTube, is turning all those downloads and streams into revenue. Sure, this is a theme I've hammered on before but you can't turn cool Web-based technology into a business without revenue. If you examine Zennstrom and Friis' entrepreneurial track record, Kazaa was not a business but a way to download music and video for free while driving the music industry crazy. Skype was on its way to becoming an interesting telecom business before eBay stepped in with a $4.1-billion takeover. As for "The Venice Project", your guess is as good as mine about its prospects. There's plenty of competition but Zennstrom and Friis has three major weapons in their arsenal: lots of personal cash, plenty of VCs likely chomping at the bit for a piece of the action, and the relationship with eBay. The big question facing Zennstrom, Friis and the boys over YouTube is whether they can attract another Skype-like mega-offer.
Update: Other signs of the video-craze include the launch of Dabble and Gotuit. John Battelle has a post on why YouTube isn't worth $1-billion.
