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Tuesday, July 25, 2006

How Google Could Beat YouTube

For the moment YouTube appears to have an insurmountable lead in the user-generated video space. YouTube has the quirky, clever, and oddball content from thousands of individuals, while Google Video has Mr. Magoo and Charlie Rose.

However, Google has several things -- namely Google Checkout and an advertising network -- that YouTube doesn't, and the power of the purse could turn the tide.

IF Google placed more ads on its website and shared some of the revenue with contributors, they would get many of the YouTubers to post on its website. Google should make a deposit to each contributor's Checkout account, let's say $4 for every thousand videos streamed. (Or, Google could pay a smaller amount by check if people really don't want to participate in Checkout.)

If a video become a hit, then everyone makes money, and getting every contributor to open a Checkout account grows the service. Also, Google takes a cut each time the money is spent on one of its partners website, so the money never really leaves. It's the same model as compensating bloggers who put AdSense ads on their websites.

Sure, some folks may be offended by this "company store" setup, but the most creative contributors would happily jump ship if they could make a few hundred or thousand bucks for their efforts, as opposed to giving up their rights to YouTube. Conversely, YouTube could form a partnership with eBay to protect its turf.

By Jason Dowdell at 11:04 AM | Comments (0)

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