By early 2006, YouTube had substantial peering in place. It's easy to prove: they talked about their programs at NANOG (https://www.nanog.org/meetings/nanog37/presentations/bill.no...). Without those, they would have folded already. They were acquired by Google only at the end of the year.
Google doesn't own all of its fiber. Also, some ISPs have made public claims of being paid by Google for transit traffic. Google, but also ISPs, saves a lot of money through peering or the Google Global Cache. This is also why YT had peering in 2006: remember that traffic moves across multiple ISPs and it wasn't just YT's costs that were going to go up with their exponential growth.
Last but not least, consider that Netflix doesn't own fiber – or at least haven't announced any – and they haven't been sunk by network costs, thanks to peering and edge caching.
[I used to work at Google and knew at the time quite a bit about YT's infrastructure. The above is all public information.]
I mean, this is not unheard of in Silicon Valley.
Be it YouTube or some other company, truth is online user-generated video was bound to be huge given the growth in bandwidth capacity and improvement in smartphone cameras.
The fact that specifically YouTube is what it is right now might be because it operates under the Google umbrella. Had the acquisition not happened, I'm sure we'd have at least a couple online video unicorns feeding off the huge demand for video and supply of people wanting to share.
By this logic Netflix shouldn’t exist because it doesn’t use Google’s network assets. I’m pretty sure YouTube’s advertising revenue should cover its cost of building out CDN and transport infrastructure.
Even if that's true (which I doubt), Google is not the only company that owns fiber.
> If you are taking a consumer benefit angle I don't see how you conclude that Google should have been prevented from buying YouTube.
The GP was talking about a "shift away" from the "'consumer welfare' view of anti-trust," because that view permits acquisitions like that of YouTube by Google.
Would you rather have Verizon owning YouTube?
Every single telco has tried to launch their own YT. They launched, and every single one of them failed.
The reason they keep failing is that they are telcos, their core capabilities do not play well with an open, network agnostic, consumer-driven video service. They'll prioritize their own content and their own network (look at Verizon and "Oath").
If you "deleted" YouTube, and both Amazon, Google, Verizon, AT&T launched video services, which ones do you think would succeed? Definitely Google's, maybe Amazon's, definitely not Verizon's or AT&T's.
Google happens to be a "third-party content access monetizing" company that owns infrastructure, not an infrastructure company trying to be a "third-party content access monetizing" company.
>Even if that's true (which I doubt)
Literally one hour ago Alphabet CFO went thru some advanced mental gymnastics to avoid straight answers about youtube profitability:
https://news.ycombinator.com/item?id=19080868
- No youtube breakout of revenues, Again not a bullish sign for that division, stil nothing on youtube on the call.
- EDIT on the earnings call they did talk briefly about Youtube, no real new numbers though, just their assurance that youtube is crushing it
- Porat is doing gymnastics to talk about youtube but not actually say anything about youtube. Are youtbue numbers really that bad????
So, it seems that OP is mostly correct in his assumption. Normally CFO of public companies are not shy talking about their successful bets.
Google is probably the only non-telco who owns significant infrastructure. So other than Google, the only other option for YouTube would have been a telco.
Are you sure you'd want a telco owning YouTube? Can you imagine how awful it would be?
Vimeo is owned by IAC, who then owned AskJeeves, TripAdvisor, HotWire, LendingTree and today owns Tinder, OkCupid, Match.com, The Daily Beast, etc.
You sure you'd want the top video website owned by IAC?
What about Amazon or Microsoft?