Case Detail

Case Summary

YouTube, Google, and the Rise of Internet Video

Case Number: 5-408-752, Year Published: 2009, Revision Date: January 27, 2012

HBS Number: KEL403

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Authors: Karel O. Cool; Matt Seitz; Jason Mestrits; Sona Bajaria; Uday Yadati

Key Concepts

Critical Mass, First Mover Advantage, Growth Strategy, Convergence, Industry Development, Winner-Take-All Competition

Abstract

Although Google had a stellar performance in Web search, many of its other services, such as Google Video, were less successful. This case describes how YouTube came to dominate the video market for user-generated content (UGC), while Google Video tried various entry strategies and ultimately failed, ending with the acquisition of YouTube. It also reviews the various competitors in the UGC market, chronicles the entry of established and new players in the area of professionally generated content (PGC), and outlines the key challenges related to monetizing the acquisition of YouTube for Google.

Learning Objectives

The case discusses when and how to enter winner-take-all markets characterized by very strong network externalities. It focuses on the strategies of new entrants vs. those of incumbents in adjacent industries that seek to leverage their resources and skills. Further, it sheds light on how new industries are created, how convergence is changing competitive forces, how important it is to be a first or late mover in new markets, and how successful entrants may struggle to achieve profitability.

Number of Pages: 25

Extended Case Information

Teaching Areas: Marketing, Strategy, Technology

Teaching Note Available: Yes

Geographic: United States, Global

Industry: Media

Organization Name: Google, YouTube

Organization Size: Large

Decision Maker Position: CEO

Decision Maker Gender: Male

Year of Case: 2007