Episode 7: YouTube

[0] Okay, listeners, Now is a great time to thank one of our big partners here at Acquired, Service Now.

[1] Yes, ServiceNow is the AI platform for business transformation, helping automate processes, improve service delivery, and increase efficiency.

[2] 85 % of the Fortune 500 runs on them, and they have quickly joined the Microsofts at the NVIDIAs as one of the most important enterprise technology vendors in the world.

[3] And, just like them, Service Now has AI baked in everywhere in their platform.

[4] They're also a major partner of both Microsoft and Nvidia.

[5] I was at Nvidia's GTC earlier this year, and Jensen brought up ServiceNow and their partnership many times throughout the keynote.

[6] So why is ServiceNow so important to both Nvidia and Microsoft companies we've explored deeply in the last year on the show?

[7] Well, AI in the real world is only as good as the bedrock platform it's built into.

[8] So whether you're looking for AI to supercharge developers and IT, empower and streamline customer service, or enable HR to deliver better employee experiences, service now is the platform that can make it possible.

[9] Interestingly, employees can not only get answers to their questions, but they're offered actions that they can take immediately.

[10] For example, smarter self -service for changing 401K contributions directly through AI -powered chat, or developers building apps faster with AI -powered code generation, or service agents that can use AI to notify you of a product that needs replacement before people even chat with you.

[11] With ServiceNow's platform, your business can put AI to work today.

[12] It's pretty incredible that ServiceNow built AI directly into their platform.

[13] So all the integration work to prepare for it that otherwise would have taken you years is already done.

[14] So if you want to learn more about the ServiceNow platform and how it can turbocharge the time to deploy AI for your business, go over to ServiceNow .com slash acquired.

[15] And when you get in touch, just tell them Ben and David sent you.

[16] Thanks, service now.

[17] Who got the truth?

[18] Is it you?

[19] Is it you?

[20] Is it you?

[21] Is it you?

[22] Is it you?

[23] Sit me down.

[24] Say it straight.

[25] Another story on the way.

[26] Who got the truth?

[27] Welcome to episode seven of Acquired.

[28] I'm Ben Gilbert.

[29] I'm David Rosenthal.

[30] And we are your hosts.

[31] Today we sit here on the eve of the announcement that Google is the most valuable company in the world to tell you about Google's acquisition.

[32] Google announced that they were the most valuable company in the world.

[33] What?

[34] Google announced earnings and people are speculating that it might.

[35] Oh, when it opens tomorrow.

[36] I haven't checked the stock price, but that Google's market cap might pass apples tomorrow.

[37] Ah, gotcha.

[38] Mr. Market will tell.

[39] Yeah.

[40] In steep contrast to what we normally do on this show, that is just conjecture and and hypothesizing we never conjecture on this show we're going to talk about kind of an older acquisition when when you look at the the companies that we've looked at so far um google acquiring youtube david wanted to uh take it away with acquisition history and facts will do so youtube this is a big one um founded youtube was founded early 2005 by two former engineers and one former designer from PayPal.

[41] Part of the much -belly -hooed PayPal Mafia, and interestingly, we'll get more into this later, YouTube was one of the very first investments at Sequoia by another member of the PayPal Mafia, Rolloff Botha.

[42] Just keep it in the family.

[43] So it was founded in early 2005.

[44] And then in November of 2005, Sequoia and Rolloff come in.

[45] They lead a $3 .5 million series A. And then a few months later, it was very, very early growth days having just released the product when Sequoia leads the series A. A few months later in December of 2005, SNL, remember the lonely, Island days on SNL, this get lazy Sunday, was, comes out and, um, wait, so it only took us seven episodes to talk about Andy Sandberg here on Acquired.

[46] Ironic, I know.

[47] Editor's note, David looks like Andy Sanberg.

[48] There should be no inside jokes in podcasting.

[49] Lazy Sunday comes out and a whole bunch of people, like, video their TVs and post, post it to YouTube and I don't know if this was an aggregate or just one of the versions of the clips of this clip of Lazy Sunday generates 7 million views on YouTube which was huge I mean like there were only 100 ,000 people on the site before then yeah I think even at acquisition they had an audience of 72 .1 million but they were reporting 19 .1 monthly active users so I mean to get that kind of view count that early and that was even you know a year I'm sure it was a lot of college kids like me watching it over and over and over again.

[50] Well, the amazing thing is thinking about watching it on, you know, people filming their TVs like that.

[51] That's like what vines look like now.

[52] Yeah.

[53] Talk about kind of the history rewriting itself.

[54] So on the back of Lazy Sunday, among other viral hits, April 2006, the company raises an $8 million series B, also from Sequoia with Artists Ventures, which I believe led the round.

[55] And by the summer of 2006, YouTube has grown in July to about 100 million video views a day, which is pretty incredible.

[56] And then a whole bunch of problems that arose with that, which we'll get into in a minute.

[57] But very shortly after, October 9, 2006, Google announces that they are going to purchase YouTube for $1 .65 billion.

[58] Incredible.

[59] I mean, this is just over a year and a half after the founding of the company, literally in a garage.

[60] They'd only raised $11 .5 million in venture capital.

[61] So the multiple $11 .5 million to $1 .65 billion.

[62] That's what, $120