Forrester's Charlene Li on Google's YouTube Purchase

And basically, by YouTube isn't just the fact that it’s growing but they’re getting this
people to come back, week after week, day after day, month after month and continue to
see the videos. And I think that this was so they make it so easy to find these things. And
also, add more of a social component to it as I can add favors. I can share that with all the
people too as well. It is just very funny with the small SIM pets and very humorous and
kind of that keeps going up let’s say for a short cycle again. The more people see it, the
more you're likely to add things on to it or to footage collections, add comments on to
that.

The business model has always been about any media companies that I have eyeballs. I
can sell to as eyeballs. So it is going to be an advertising model so I'm not so worried
about what the business model for YouTube is going to be. It’s clearly going to be around
primarily advertising because you can’t say no to 100 million people. We’re looking at
this great information. You can contextually advertise to them. You know they have high
speed access. It’s an advertisers love video so what’s not to love about them.

I think the hardest thing will be to understand which types of advertising worked in that
environment and in that case there will be a lot of experimenting around that. And I think
frankly, it will be people who actually say, “Okay, let’s do a campaign. Let’s do a contest
and upload your video for the next ad promoting the new Nike shoe for example.” And
now it’s just be something fired with the people who just kicked off. You can’t answer
better advertisers with Menthos and Diet Coke than what you're seeing today with all
those extreme Diet Coke and Menthos videos that are going out there.

Well, one of the key ways has always been around something bad around these videos
which frankly people don’t really see that well because they’re watching the video, right?
So, I think what’s interesting is if they are generating new revenues, one of the
possibilities you’ve actually sharing that with some of the people who create the videos
themselves. So a great example of that is the extreme Diet Coke and Menthos experiment
for these guys put together hundreds of liters of Coke and they had it like Belazio
fountain kind of display so they send a deal with Revver where they actually are sharing
some of their advertising remedies back to them.

And so I think that’s a great idea especially for some of these videos as I do strike a wish
so to speak and generated a significant audience that if they’re going to create that and
put the expenses to creating good video they should be able to share and the advertise
revenues have come back to them. I think that’s going to be a nice for choice circle
because if you have more people who make money from that, they’d spend more money
creating good video and drive more people to that particular site too as well.