Google bought YouTube for US$1.65 billion in stocks just
Google bought YouTube for US$1.65 billion in stocks just 18 months after YouTube’s creation.
YouTube was founded by Chad Hurley, Steve Chen, and Jawed Karim, who were all early employees of PayPal. Prior to PayPal, Hurley studied design at the Indiana University of Pennsylvania. Chen and Karim studied computer science together at the University of Illinois at Urbana-Champaign.YouTube’s early headquarters were situated above a pizzeria and Japanese restaurant in San Mateo, California.
The domain name “YouTube.com” was activated on February 14, 2005, and the website was developed over the subsequent months. The site opened its doors to uploads on April 23, 2005. The first YouTube video uploaded on April 23, 2005 was titled Me at the zoo, and shows co-founder Jawed Karim at the San Diego Zoo.The video was uploaded on April 23, 2005, and can still be viewed on the site.
Like many technology startups, YouTube was started as an angel-funded enterprise from a makeshift office in a garage. In November 2005, venture firm Sequoia Capital invested an initial $3.5 million; additionally, Roelof Botha, partner of the firm and former CFO of PayPal, joined the YouTube board of directors. In April 2006, Sequoia and Artis Capital Management put an additional $8 million into the company, which had experienced hugely popular growth within its first few months.
On October 9, 2006, it was announced that the company would be purchased by Google for US$1.65 billion in stock. The purchase agreement between Google and YouTube came after YouTube presented three agreements with media companies in an attempt to escape the threat of copyright-infringement lawsuits. YouTube planned to continue operating independently, with its co-founders and 67 employees working within Google. The deal to acquire YouTube closed on November 13, and was, at the time, Google’s second largest acquisition. Google’s February 7, 2007 SEC filing revealed the breakdown of profits for YouTube’s investors after the sale to Google. At the time of reporting, Chad Hurley’s profit was more than $395 million and Steve Chen’s profit was more than $326 million.