Google missing the “video” opportunity: * Poor initial design: Google launched its Google Video service in January 2005. It designed its website with features where users can search videos. Google wanted to ease the viewing of television programs by helping users search TV shows and discovering where and when to watch matching television programs. Google lets users find the videos in the search history and bookmark it, but it’s more difficult to do it. This design did not go well with users. Compared to YouTube, YouTube had a more simple design where searching of videos was easy. Lacking openness: It did not show the number of views, links to a video, so users could have a better perspective about a video instead Google showed the number of views only to the uploaders. To upload UGC users had to first submit their videos to desktop client which had to be downloaded and installed first. * Unsatisfactory Service: Google video service was unsatisfactory compared to other UGC video sites. It did not show the actual video instead it showed the list of related video and news related to the searched video and still images of original video. Google Video has disappointed twice it was first a TV shows search but without videos and then a site that required a software to play videos (a version of VideoLAN). Google offered new flash technology which was faster for uploading videos but it was slow. * Copyright Issues: Google is more inclined to remove copyrighted content and to sell premium videos. Whereas YouTube has a lot of free music videos and TV shows without having the legal right, so it attracts more people. This gives an advantage to YouTube and other competitive websites. It came with a cost: Google video offered premium content and payment had to be made through Google checkout. Whereas, YouTube users could upload, view and share video clips free of charge. Google’s/YouTube’s Business Strategy: There might be some reasons behind the acquisition of YouTube by Google that were not known to public. It is obvious that 1. 65 billion USD price were far too high for its intrinsic value. Hence, we believe that Google could gain strategic advantage for doing so. * Transformation into Video Search Engine: Initially after the merger you tube decided to remove all the copyright materials from the site and follow the policy of removing any video upon the notification from the notification from the legal copyright owner due to which different production company can approach to the sites to advertise and upload their videos on the sites. But after one year Google announced to plan to transform Google videos into a video search engine and begin to index you tube videos add personalized recommendation on the homepage and moreover even they announced that Google video was operating as a free video –sharing and video search engine. Advertisement Revenue: During this acquisition there was a new trend going on for Online Advertisement which would fluctuate from $1. 6billion to $8. 175 billion in the period of 2006 to 2011 so by taking this factor in the consideration Google/You Tube decided to launch an advertisement program within the you tube videos and the program encouraged the website developers and blog authors to embed you tube videos in their sites and the revenues from this advertisement would be shared within web site. * Customer Satisfaction: There were many customers of Google who were used to the search engine which made customers rate of access to the website increment. If those customers get similar facility in you tube then it will change their perception towards accessing other video gallery websites and cause a sudden attraction to you tube through influence. As a result more people will be informed about the sources for watching streaming videos. In this case, YouTube videos can be listed on the top of the search result to give viewers the incentives to choose. All of this doing is somewhat directly related to “behavior modification”. For instance, when a person wants to search for some information on the search engine, instead of getting the result list of text and journal documents, he or she will be given some video-related contents. After that same person is given and watched video contents many times, in future he/she will be searching for videos instead of traditional text information. This so-called behavior modification is being used and might prove to be effective since the number of online video viewers seem to be on the increase trend. * Network Technology: The strategic reason behind YouTube acquisition might be because of YouTube has network designs specifically for video streaming while Google might not have the available networks to handle the video expansions. Thus, it makes sense that Google paid lump sum amount of money for acquisition. The main reason is that setting up a new network capacity for video-market expansion is somewhat takes lots of time and efforts. A newly established website for video streaming might have to be adjusted, modified and updated rapidly in order to cope with the changing needs of the video viewers. Hence, apparently it is a lot easier for Google to acquire YouTube, since Google does not have to risk doing the expansion all by itself. Google’s/ YouTube’s competitive advantages: * Ease of access: The main advantage YouTube had been its easy accessibility. Users could visit the website see videos or upload videos or share videos. This helped it gained an edge over its competitors. Others were trying to build a video search engine product whereas YouTube kept it simple and easy by making a product based on user-generated content with the idea of sharing videos. * Initial Lead: When YouTube was launched in February 15, 2005 it gained enormous success by word of mouth and was ranked the fifth most popular Web site in 2006. At that time figures quoted that 100 million clips were watched daily and 2700 videos uploaded every hour. This helped it gain a lead over its other competitors who were still trying to hold grip of this rising video on the internet market. * The addition of Google brand name: In 2006 Google purchased YouTube for $1. 65 billion. This merger gained huge attention across many industries and helped strengthen the YouTube’s image. It helped to get agreements to place branded content on the site. It also gave YouTube more funding. * Brand recognition: YouTube was more popular on the internet and with Google being its subsidiary it had made it more popular. YouTube is a well established video portal with the huge advantage that content is added every second by its visitors. For instance most Internet users probably do not know that Microsoft has its own video portal called MSN Video. That is probably the greatest weakness of MSN Video that hardly anyone knows about it and that this has direct impact on the amount of available videos. Social Network services: YouTube allowed users to post comments on the videos. This helped users to create a social network where they could share their likes and dislikes. It also had a like and dislike option and showed the number of views for a video. YouTube is more open it shows the number of views, links to a video, so users can have a better perspective about a video. This made easy for the users to access the most viewed videos. YouTube also had features where it displayed the top rated videos. Along with viewing current video it also gave option to view videos based on similar content. It has options to subscribe videos and to share videos on other websites. YouTube lets users have favorite videos, so it’s easy to view the same videos again. Users can create playlists in YouTube, and share them. In YouTube users can become a member of a group and discuss all sorts of topics related to videos. YouTube lets people create an online identity, so it’s closer to a social network this helped it gain an image of social video website. Increasing YouTube’s operating revenues: * Building an algorithm similar to Google’s search engine: Google’s search ngine is based on its algorithm which displays search pages based on it. A similar type of algorithm should be built for searching videos which enhances the viewing experience for the users. Based on this we can target most viewed videos posted and based on this should charge a minimal amount. * Google’s Ad sense: Google’s major source revenue has been advertisement and over the years it has gained a lot of expertise and a market lead in this segment. Google should not focus on integrating its Google Video with YouTube instead it should look for integrating Google Ads with YouTube videos. A threshold should be made above which the viewed videos should integrate advertisement along with it. The advertisement should not be more than 10-15 seconds. Google Ad sense helps in providing products based on users search results a similar approach might help generating revenues with YouTube. * Customized Advertisement: Integrating advertisement with videos can be annoying for the users. YouTube should provide more customized ads that is based on user information such as likes, dislikes, sex, age and so on. A good example of customized ads is provided by Facebook which shows advertisement based on users likes and dislikes. Customer interaction: YouTube has a touch of social network site where users comment on videos. This idea should be taken ahead where users can buy products based on the number of views received by an advertisement, on the comments of the users and number of likes/dislkes. This can help users in knowing the product better and YouTube should start service where users can even purchase this products. This way YouTube can generate a lot of revenue from the company whose products advertisements it displays. Moreover the need of users also should be customized based on past purchases. Helping Small Business: Start up requires enormous amount of advertisement and funding to become successful. YouTube should plan out advertisement strategies for such startup companies where it can promote its products and should charge minimal to these companies. With the scope of internet and videos the scope of business would be large. * Free Video: The one of the main reasons for the success of YouTube was that users could access any video posted even if it was copyrighted. Later as YouTube became big and it had to face legal issues for copyright material. For being successful and to generate more revenue YouTube should again focus on providing copyright video to users for free. This is possible if YouTube ties up with such companies and pays them the subscription fee. YouTube can embed its advertisement video of choice between such videos and generate revenue through advertisement. * Live Streaming: The most viewed videos are of live sports during big events such Olympics and World Cup. YouTube should take advantage of this and should tie up with broadcasters so it can provide live streaming of such big events. Again the source of revenue is possible via advertisements of various kinds.