It all started when Sony
bought Grouper for $65M

Similar to real estate
sales in your neighborhood, that transaction established a benchmark against
which other video sharing websites could be evaluated. 

was valued at $1B USD.

Mark Cuban didn’t agree
and said “only a moron
would buy YouTube

People against the $1B valuation,
like Cuban and some analysts, said that most content on YouTube was stolen and that would eventually
to their demise

people interpreted copyright law (most notably, the Digital Millennium
Copyright Act – DCMA) a little differently.

People that support the
valuation point to YouTube’s increasing
, easy
to use toolset, and social networking environment

YouTube passed
NYTimes.com traffic in March
and MySpace
traffic in July
. Click through to
the charts they’re pretty impressive. 

Warner Music
Group decided to give YouTube a shot

New York Times
quoted Alex Zubillaga, Warner’s executive vice president for
digital strategy, “This is a framework that allows us to monetize our assets
while we unleash the creativity of the user.”

Time will tell what
YouTube is really worth

The bottom line: Can
YouTube be both profitable and legal?

Some ideas on that …

UPDATE 10/6: Google in talks to buy YouTube for $1.6B; YouTube Worth It?