YouTube was founded by Chad Hurley, Steve Chen and Jawed Karim when they worked for PayPal. Prior to working for PayPal, Hurley studied architecture at Pennsylvania University of Indiana; Chen and Karim studied computer science together at Urbana – Champaign University of Illinois.The initial headquarters of YouTube was above a pizzeria and Japanese restaurant in San Mateo.
Google did not include comprehensive estimates for the operating costs of YouTube, and YouTube's 2007 revenue was reported as "not significant" in a regulatory filing. In June 2008, a Forbes magazine report projected revenue of $200 million for 2008, citing improvement in advertising revenues.
Some industry analysts have speculated that operating costs for YouTube (specifically the network bandwidth required) may be as high as $5
to $6 million a month, thus fueling speculation that the organization, like other Internet startups, did not have a viable business model.
The platform launched advertising starting in March 2006. YouTube started using Google AdSense in April.
Commodified Internet spaces are often profit-oriented, but the products they offer are not always exchange-value and market-oriented; in some cases (such as Facebook, Yahoo, MySpace, YouTube,Netscape), free products or sites are made available as gifts to push up the number of users so that high advertising prices can be paid for profit.
In June 2009, BusinessWeek revealed that, according to RampRate, a San Francisco-based IT consulting company, YouTube was far closer to profitability than previous estimates, like April 2009, a forecast by investment bank Credit Suisse predicting that YouTube would lose as much as $470 million in 2009.
YouTube launched a trial program in May 2013 to give certain content providers the option of paying $0.99 a month or more for those channels, but the vast majority of its videos will remain free to watch.
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