32 Comments

Summary:

Earlier this week, Yahoo announced a revamped video hosting service. Many saw it as a threat to You Tube (which has issues of its own.) In reality, Yahoo! has its work cut out. I checked with folks over at Hitwise, a traffic analysis and research firm, […]

Earlier this week, Yahoo announced a revamped video hosting service. Many saw it as a threat to You Tube (which has issues of its own.) In reality, Yahoo! has its work cut out. I checked with folks over at Hitwise, a traffic analysis and research firm, and they sent me data which shows that You Tube is miles ahead of their competition, including Yahoo! Video.

For instance, YouTube’s market share of Internet visits has increased 110% over the past three months (week ending May 27 versus week ending March 4, 2006). Yahoo! Video has increased its market share of visits 22% for that same time period. You Tube usage metrics are ahead of Yahoo. For April 2006, YouTube’s average session time for that month was 15 minutes 33 seconds. Yahoo! Video’s average session time was 15 minutes 13 seconds.

In April 2005, Yahoo! Video’s average session time was 10 minutes 29 seconds and YouTube was not up yet. And just for kicks, for the week ending May 27, 2006, YouTube was the #43 ranked website among all websites, while Yahoo! Video was ranked #205 among all websites.

You’re subscribed! If you like, you can update your settings

  1. Aidan Henry Friday, June 2, 2006

    I think that YouTube has a strong position and a compelling viewing experience that will not be matched in the near term. It will be interesting to see their revenue model moving forward, as they are spending millions on bandwidth as we speak.

    I do not believe that Yahoo, or Google for that matter, will match YouTube – at least in the short term. They are known as search engines with supporting video portals. YouTube IS a video portal specifically, which gives it the edge.

    I think YouTube should be leery of other video communities that are coming on strong such as MetaCafe, Bolt, and Break.com. These tight communities have the ability to eat away at YouTube’s market share stranglehold.

    YouTube needs to continue innovating and improving the viewing experience for the user. On a positive note, the reason YouTube traffic continues to soar is that there are so many videos on the site, that at any given time a user KNOWS that they can find what they are looking for. This ‘critical mass’ characteristic will only grow stronger over time, as will YouTube’s popularity.

    ~Aidan~

  2. Are they tracking video.yahoo.com as well as video.search.yahoo.com, or just the latter one?

  3. Michael Katcher Friday, June 2, 2006

    Can we please not say YouTube has “higher usage metrics” when there is a 2% difference! Let’s at least be intellectually honest and say “slightly higher” or “marginally higher” or something to that effect. I can’t imagine 2% is any kind of appreciable difference.

  4. Good point Michael. I do think higher usage metrics is the correct way of saying it, though i think a more explicit sentence makes better sense.

  5. DaveMc500Hats Friday, June 2, 2006

    YouTube did a great job creating easy ways for their users to upload, view, and virally share & distribute videos. while some of their best practices might not be complicated for others (like Y & G) to duplicate, YT did a pretty darn good job right out of the gate and innovated quickly on making them better.

    i think Yahoo will be copying a lot of YouTube features, however i’m guessing YouTube will continue to innovate and stay ahead of both Yahoo & Google. And as big companies (even nimble ones), i sincerely doubt Yahoo or Google will be able to match the pace of iteration / innovation the YouTube folks appear to be executing.

    of course i’m biased since i used to work with those folks, but i also know they have their sh*t together from years of running fast at PayPal & having to respond quickly to eBay and other competitors (not to mention fraudsters). PayPal was a great incubation environment for a bunch of smart engineers to hone their skillz in architecting great internet services & incrementally making them better.

    Yahoo & Google are certainly not slouches, but if i’m a betting man my money’s on YT.

  6. It just shows you that you don’t need a company full of PhD’s to create break away products.

  7. Robert Dewey Friday, June 2, 2006

    Yeah, YouTube will be done in 12 months when their last round of funding runs dry :lol:

  8. I assume you all know what attracXXXts the most viewers to their site? If not then just look what you find in their Top Download list.

  9. @Robert Dewey

    I think that’s what people were saying for a lot of start-ups. And they were probably right in 95% of the cases. YouTube, however, looks like a runaway hit to me.

    The big guys play the imitation game because it makes business sense. There’s a chance that they get it totally wrong and their money is good as gone but more often then not, they manage to “secure” a number two or three position.

  10. Alex Rowland Saturday, June 3, 2006

    YouTube is not going to run out of money. They have become a cultural phenomenon with enormous month over month traffic growth. If YouTube went out to raise cash right now, they could raise a $100M round and be oversubscribed. Now, this is not to say that they are going to have an easy time monetizing their traffic. YouTube is going to be stuck with banners and AdSense unless they evolve their business model. I don’t think that these sources of revenue provide the kind of margins that YouTube should be capable of achieving.

    Yahoo’s model of indexing across different publishers is ultimately a better strategy than YouTube’s. But it will take many months (if not years) for this strategy to pay dividends. Other publishing mechanism are rising, and most importantly, mechanisms like Brightcove, NarrowStep and others that provide mid-market video are going to become increasingly important (not to mention broadcast). Within YouTube’s existing model, there is no opportunity to include these sources. Nobody is going to become the central repository of all video. That’s not the way the Internet works; that’s the AOL model and I think everyone knows how that works out.

    I think the biggest problem is YouTube has shown little innovation over the past 12 months (other than some basic interface tweaking). I think they’ve been so busy trying to handle the load that making substantive improvements to the service have been difficult. It’s the classic problem of growing so fast. When you grow that fast most of your time is spent just managing the growth, not driving new growth.

    Yahoo has some fundamental problems with the way they’ve managed channels and some of the other social aspects of the site. Because they’re Yahoo, people won’t give them much of a break. But as far as I can see, they are the first service to make a good effort at searching across multiple video sources. It’s not perfect, but watch the advantage this generates as the quantity of video sources explodes. Yahoo’s real innovation is simple search across multiple publishing systems. YouTube has little to worry about today, but unless they start innovating again and realize they can be outflanked by better execution of the Yahoo strategy, they will have something to worry about in the near future.

    But again, access to cash certainly isn’t one of them…

Comments have been disabled for this post