Mark Cuban, co-founder of HDNet and owner of the NBA's Dallas Mavericks, said that only a "moron" would purchase YouTube. His reasoning being that it will only be a matter of time that YouTube will be "sued into oblivion." He also had choice words for viral marketing campaigns saying they don't work because "what makes viral so special is it's so hard to do. It's so hard to plan. It's hard to stand out." He also says there is no substantial advertising potential in sites like YouTube. I like Mark Cuban but this is a little harsh and I have to disagree with him on some points. YouTube will have to reckon with copyright law at some point and it is going to very ugly but they can survive it. YouTube is not just about copyrighted content, I'd say 50% of what is on the site is truly user generated. There is tremendous advertising potential in Youtube. It might not be right now but it can be. What if they decided to sell ads based on keywords or tags? They would have a mini-Google. It is too early in the game to dismiss them.
1. It is so weird to hear the folks that want see YouTube dead. Frankly, YouTube is the incarnation of a confluence of factors that had to create an outlet. It's pent-up creative energy, low cost (high quality) cameras, and broadband. Really, YouTube just needs to stay simple, focused, and solid and they'll continue to grow.
The folks that think YouTube is driven by copyright infringement haven't spent 10 minutes on the site. Right now, of the top 20 videos, only 2 are from tv (one from The Daily Show on Comedy Central, the other from CNN). There are videos that have been up less than a day that have 150,000 views. That's extraordinary.
And i totally agree about advertising, tons of options for them... they're smart to take their time. Clearly the folks at Sequoia can afford to let them work through the issues of making deals with music, film, and TV guys - and they're certainly out there doing that now.
It's crazy to think they won't be part of the future of all this. And Mark Cuban knows that better than anyone.
Posted at 9:12PM on Sep 30th 2006 by Steve