Did YouTube Just Raise another $25 million?

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1. Mike
   

   April 30th, 2006 at 6:36 pm

   $1M in bandwidth per month!!!

   How does photobucket manage I wonder? I think it was stated a few weeks ago that they account for 3% of all internet traffic?

2. Andrew Fife
   

   April 30th, 2006 at 7:06 pm

   VCs typically look for 10X their investments. $36.5 x 10 = $365M and despite their tremendous growth (ranked 44th by Alexa) I’m not sure YouTube will really be able to command that type of liquidity event.

3. Decipho
   

   April 30th, 2006 at 7:13 pm

   What does this value YouTube at, over $1 billion?

4. Andrew West
   

   April 30th, 2006 at 7:34 pm

   Have you thought about a discussion board for your readers? I appreciate being able to leave comments but it would be awesome to have an organized place to discuss possible rumors, etc with other readers.

   YouTube’s bandwidth being over 200TB a day is just absolutely nuts. I can’t even imagine that. Infact, I’m sure their DC is loving themselves right now. (Do they have their own DC, or what’s the deal?)

5. Sobask
   

   April 30th, 2006 at 7:57 pm

   Where did you get that 200TB number?

6. Andrew West
   

   April 30th, 2006 at 8:14 pm

   http://www.forbes.com/home/int.....video.html

   “YouTube, which is streaming 40 million videos and 200 terabytes of data per day, may be paying between a tenth of a cent and half a cent per minute.”

7. Saul Weiner
   

   April 30th, 2006 at 8:17 pm

   I think this will be a test of the web2.0 ad revenue generation model. Can a company outside fo teh big boys make it on ads alone?

8. Sobask
   

   April 30th, 2006 at 8:21 pm

   So they’re paying on average $51.50/mbit/month?

9. Mike
   

   April 30th, 2006 at 8:26 pm

   If they used amazon s3, 200TB/day would cost $900,000/month.

10. Andrew West
    

    April 30th, 2006 at 8:27 pm

    If that’s the numbers they’re coming up with then, I guess so. I don’t know for a fact, I just heard it through my business partner and then did a search when you asked me.

11. Ori
    

    April 30th, 2006 at 9:09 pm

    You keep saying how ‘it makes sense’ and ‘makes a lot of sense’, the only thing that does not make any sense is their revenue model and why would any VC want to spend one more cent on an AD based model…. again… The only way to read Sequoia’s move if your estimate is right and that they actually run two back to back founding rounds, is that they are desperately trying to save their ass by generating an overvaluation that might increase slightly the exit value. If they truly believe in YouTube, the overvaluation would never compensate the dilution.

12. Michael Arrington
    

    April 30th, 2006 at 9:21 pm

    Ori - The context of what I wrote is that the rumor makes sense, and I believe it could be accurate. I did not say anything about YouTube’s business model.

13. mamamia
    

    April 30th, 2006 at 11:17 pm

    here’s the game…vc’s are propping up youtube with as much cash as they can afford to lose. 1 million a month burn rate = mucho mullah. they hope that some big boy will come in and scope up their money pit and save their freaking arshes.

    if yhoo, fox, etc. decide to wait it out…they can pick youtube up for peanuts….once the vc money runs out. take a look at friendster. big hype a year ago, now, you can buy that site for a bag of chips.

14. Erik Schwartz
    

    May 1st, 2006 at 8:16 am

    Well this makes the recent round Facebook raised (also $25 million) downright conservative.

    Proving ones business model should ideally be done with the seed round, not the series c.

15. Daniele Levy
    

    May 1st, 2006 at 9:04 am

    My unsolicited $0.02: speculation like this makes the real news you publish less believable. I am sure you’ll find out that you’re dead wrong on this one again. If Techcrunch is trying to compete with real news organizations (wired, red herring) like you mentioned recently, it will need to live up to their standards in terms of the news you publish. Otherwise, we’ll all be questioning the accuracy and seriousness of each article you run. I like Techcrunch and would love for it to be a serious source of news. Let us know when you get confirmation on your rumors.

16. max
    

    May 1st, 2006 at 10:47 am

    Being that YouTube is using Cogent as a bandwidth provider, I highly doubt their bandwidth costs are anywhere near $1M per month. 200TB per month coverts to about 600 Mbps. If they are paying that much for 600 Mbps over Cogent, they need to have a serious talk with their sales rep ASAP. I would guess it is much closer $500k at that volume.

17. Aston Schmidt
    

    May 1st, 2006 at 10:47 am

    Agreed. I think it’s clear that this rumor is total bullshit.

    If you keep publishing crap like this it will continue to dillute the seriousness of your site.

    Please, if you want to play the news game, be an adult.

18. max
    

    May 1st, 2006 at 10:51 am

    Whoops. 200TB per day! Wow. That would be about 18.5 Gbps. If they are paying $1M a month for that kind of bandwidth kudos to whoever negotiated the contract.

19. Michael Arrington
    

    May 1st, 2006 at 11:07 am

    hmmm…here come the trolls. I didn’t suspect it this time. Daniele, thank you for your comment, but I find it to be condescending. Interesting that you made it as a representative of peerflix rather than as an individual. Aston, it sure could be a false rumor. Can you provide any information on that? I find the rest of your comment rude. And, I promise to keep posting crap like this. For anyone who’s read this blog for any length of time, you’ll know that this is what I do.

20. Daniele Levy
    

    May 1st, 2006 at 12:35 pm

    My previous post is poorly worded. I meant it in a constructive way as I like what you write - except when it’s “crap like this”. My opinion solely.

21. Mike
    

    May 1st, 2006 at 11:13 pm

    I don’t see why they don’t slap commercals in each video.. they would make a killing.

22. Paul Fabretti
    

    May 2nd, 2006 at 7:28 am

    I have to say, from a strategy point of view, I have a big problem with these free community sites. It is like running blind to the edge of the precipice.

    How do you maintain a same sense of feeedom and community when the bills start coming in and people need paying?

    No doubt the VC boys have seen plans that will ensure youtube brings in some sort of income but can they realistically expect to a return on their investment through advertising alone?

    How many website fell by the wayside 10 years ago on this ad-only model?

    What sort of take-up could youtube expect if it started to impose flickr-style monthly 20Mb uploads unless it had a premium service?

    Maybe experience and the critical mass gamble will ensure enough page views to make this model work second time around, but I think the longer they leave it free or “banner-only” the harder it is going to be to monetise youtube to its full potential.

23. Cheecksz
    

    May 2nd, 2006 at 10:34 am

    Why don’t they use bandwidth on demand services form companies such as Invisible Hand Networks. My buddy has an online radio station and as a result of the Bandwidth cost he almost had to shut down. But after switching to Invisible Hand he ended up cutting his cost by some ungodly number

24. Shawn
    

    May 3rd, 2006 at 8:13 am

    In addition to their hosting/streaming bandwidth costs, keep in mind that there are also Flash Media Server licensing costs.

25. Asif Alibhai
    

    May 4th, 2006 at 3:07 am

    Max @ 18,

    I think you’ll find they’re using LimeLight Networks for bandwidth. The whole world and their pet knows that Cogent bandwidth is just lame lame lame.

    I have an account with LimeLight too, and believe me the rate YouTube must be paying is heavily discounted. No need to re-negotiate there..

26. Robert Sandie
    

    May 8th, 2006 at 5:05 am

    Shawn,

    They are not incurring a Flash Media Server streaming cost. They are using progressive download which takes away a 30% overhead.

    Robert Sandie

27. Robert Sandie
    

    May 8th, 2006 at 5:05 am

    Shawn,

    They are not incurring a Flash Media Server streaming cost. They are using progressive download which takes away a 30% overhead.

28. Meredith
    

    May 10th, 2006 at 8:16 am

    So…are they going to stop sucking now?

29. jam
    

    June 13th, 2006 at 3:21 pm

    Uh-huh.
    200 Tb/day requires ~2,5 GB/s connection. I’m more interested how they store and serve their videos with that speed.
    Let’s all of us call their ISP and ask how much would that be:)

    Mine’s would initial offer would be 1,5M$:)

30. john
    

    August 16th, 2006 at 10:48 pm

    Jesus! I wonder how much mytuneslive.com pays out a month in bandwidth usage? And they don’t have nearly the visits youtube has!

    Or how companies like mytuneslive.com, who hosts and serves mp3 files, and youtube get started!