Tuesday, October 10, 2006

What next?

I'm sure everyone who reads this is hip to YouTube. I paid little attention to it until I saw some cool YT-housed videos posted here and followed up by watching some of the zillions of postings on the site.

If this is the Future, we're in deep doo-doo. Most of what isn't in blatant violation of copyright law (that is, clips shown without the permission of the original makers) is just plain awful. It's the "infinite-number-of-monkeys" syndrome: give 'em typewriters, and one of them will peck out Shakespeare. The good and the interesting are buried under piles of amateurish, unwatchable crap.

But the weirdest part of this whole thing is that Google has just paid YouTube's founders $1.65 billion for their creation. Never mind that in its 19 months of life, YT hasn't made a dime, has in fact been a money pit for its investors. Never mind that steps to make it profitable -- if that's even possible -- must necessarily rob it of its "hipness," and users will flock to some other state-of-the-moment start-up site instead. And the cycle will continue.

Don't think I'm scorning "Chad and Steve," the two semi-coherent nerds who set up YT and are now awash in more loot than most mere mortals could ever dream of. Hell, if I could think up some idea that would attract the Big Bucks the way they did, I'd do exactly the same.

But I do think this whole thing is symptomatic of a mindset that is going to screw us all up royally. At one time, money flowed to businesses that demonstrated an ability to make money. Now, it flows to "hot concepts." The fact that YT may soon find itself up to its electronic ass in lawsuits doesn't seem to bother Google; neither does the notoriously fickle nature of those now flocking to it. Nor are they bothered by thoughts of how long it will YT to take in the $1.65 billion scoots they paid for it (plus the millions already pumped into it) and turn a profit. Even if the most optimistic projections are met, that day is years, probably decades, away.

By then, someone will have come up with a newer, flashier concept, and YT will be empty and quiet except for the corporate-backed videos that are already creeping in.

I know something about how difficult it can be to raise capital for an enterprise that was designed to be profitable. I couldn't do it.

But then I was raised with the old-fashioned notion that you make money by offering something of value from which investors will earn a profit. Never mind that I haven't been very good at it; it's a system I understood. I don't think I will ever learn how to sell style instead of substance.

Oh, to have been born a computer geek....


Birdie said...

I think perhaps they are trying to kill any kind of possible competition BERORE they are a competition. Google has been coming out with so many new ideas, they want to catch this one before someone else does....

lowandslow said...

I remember back in the dot-com heyday their stock prices were outrageous. Their PE ratios were beyond all reason (most never made ANY profit) but the "experts" said PE ratios and profits were no longer relevant to determining stock prices. HUH? Profits aren't relevant? So THAT'S where I've gone astray! I keep trying to make a PROFIT! Stupid me!

MrScribbler said...

And remember what happened at the end of the "dot-com boom," lowandslow.

A lot of paper billionaires are going to end up broke and bewildered.

DAL said...

Google is in the video biz, so they could just shut YT down. Competitor gone, copyright problem solved (except for their own, Google-related ones).

If you have a good, sellable idea, you hire computer geeks with your seed money.

I bet Meg over a ebay doesn't know jttkxhol about computers and programming.

MrScribbler said...

You know what they say, dal..."a fool and his ijnuob are soon parted...."

Justfly said...

hey, hey, hey...my son has movies on YouTube!!! It is quality stuff ;)