6 Comments

Summary:

Five years after co-founding YouTube, long-time CEO Chad Hurley is stepping down from that position, according to TechCrunch. He’s been transitioning away from the CEO role for the last two years, ceding most day-to-day business decisions to Google’s former VP of web applications Salar Kamangar.

chad hurley

Five years after co-founding YouTube, long-time CEO Chad Hurley is stepping down from that position, according to TechCrunch. In fact, he’s reportedly been transitioning away from the chief executive role for the last two years, ceding most day-to-day business decisions to Google VP of Product Management Salar Kamangar.

That Hurley, who founded the online video site with Steve Chen and Jawed Karim in early 2005, would be moving on is not totally unexpected. After all, he hasn’t been a public figurehead for YouTube for quite some time. The bigger surprise is probably that Hurley has held on so long after making a bundle from Google’s $1.65 billion acquisition of the online video site in 2006.

Co-founder Steve Chen left his role as CTO of YouTube in late 2008, but remained with Google; apparently Hurley transitioned away from his duties at around the same time.

YouTube is now being led primarily by Kalamangar, who is famously known as Google Employee No. 9. He has been tasked with helping to move YouTube from a very large and popular unprofitable business to one that can use its size and scale to make some serious dough.

Google is shy about sharing too many details on YouTube’s financials, though the site is reportedly serving up more than 2 billion videos a day, and monetizing about 2 billion of those video plays per week. While that means about one in seven videos viewed actually has an ad attached, it’s unclear how long it will be before the site actually starts turning a profit for Google.

Some analysts expected that YouTube could become profitable this year with nearly $1 billion in revenues. Although Google execs have spent the last several earning calls bragging about how the site is monetizing well — and has been for some time — they’ve yet to say that YouTube has actually turned a profit.

The day YouTube actually does start making a profit will be a huge one for the web video industry; despite massive amounts of money being poured into the segment, it has had very few huge success stories to date. A profitable YouTube would not just be a validation for Google and it’s $1.65 billion investment, but for the industry as a whole.

To learn more about what YouTube is up to now, come see Director of Product Management Hunter Walk at NewTeeVee Live on Nov. 10 in San Francisco.

Photo courtesy of Robert Scoble.

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  1. Lasha Krikheli Friday, October 29, 2010

    It’s a bit crazy to think that YouTube is not profitable. Every other video page, including the videos themselves are PACKED with ads.

    Yea, I understand it costs a lot to keep a service like YouTube running, with thousands of servers and all, but what’s the deal with some YouTube stars earning 6 figure incomes? Maybe I should get in on some of the action!

  2. People keep saying that YouTube isn’t profitable, but I haven’t seen any proof of that, just a sketchy analyst report every year or so. In the last year, YouTube’s monetized traffic has grown more than 10 times.

    Reports coming from outside are always based on industry estimates for Google’s bandwidth costs, I suspect those estimates are very inflated. Other than that, it’s a pretty low-overhead business. I think the YouTube unit only has between 200 and 300 employees.

    If YouTube isn’t turning a profit, then they are very close. My suspicion is that they’re doing just fine, and are going to be a significant part of Google’s revenue in the coming years.

    As for what “the deal” is with YouTube stars earning six figure incomes….it’s hard to avoid when you have a bigger audience than the average cable television show.

  3. Chad Hurley’s contributions to the web cannot be overstated. I argue the You Tube was the first internet TV app. Whether it ever makes money or not is was a game changer that shook the established media companies at their core. Good job Mr. Hurley.

  4. Jeff Ratcliff Friday, October 29, 2010

    It all depends on how you define “profit”; by quarter or lifetime? A lifetime profit would require that they recoup their $1.65 billion acquisition cost.

  5. Google’s Real Problem – GTD: Tech News « Sunday, October 31, 2010

    [...] in past week or so, the company saw three well-known executives leave the company. First it was Chad Hurley, co-founder of YouTube who decided it was time to hang up his CEO spurs. Then came news that AdMob [...]

  6. I don’t find it surprising at all if youtube is not making a profit. Hank Green stated “Reports coming from outside are always based on industry estimates for Google’s bandwidth costs, I suspect those estimates are very inflated. Other than that, it’s a pretty low-overhead business.”

    You forget, it isn’t all about bandwidth. It is about owning data warehouses. Making the data redundant. Making the data accessible. Powering the servers. That alone is a monstrous cost. Hank, I think your estimates about the cost of being in the data industry are highly underestimated.

    Remember, video is thousands of times more dense, in terms of data, when compared to images and text.

    I think it costs a lot to run a service like that.

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