IDC Questions YouTube’s Business Prospects

Even though YouTube has about 40 percent of the burgeoning video-sharing market, with more than 13 million people visiting the site every month to watch an eclectic mix of video content, IDC research analyst Josh Martin issued a report today doubting that the service will ever be able to squeeze sufficient revenue from an audience that has gotten used to sampling the goods at no charge.

YouTube executives have indicated the company will sell advertising, which will be introduced gradually to the site during the next few months. The IDC analyst doesn’t think advertising is a sure thing, though, noting that YouTube’s core audience might be alienated by the commercialization of the site.

What’s more, Martin wonders whether advertisers will want to be associated with some of the content on YouTube, which includes amateurish, violent, and sometimes sexually graphic clips. To complicate matters further, there’s the issue of copyrighted material, which is regularly uploaded to the site by its online denizens.

Make no mistake, the challenges and issues raised by Martin are real. YouTube must find a way of matching advertising with appropriate content and of ensuring that its copyright-related legal exposure is mitigated, if not eliminated completely. Still, I am not of the opinion that YouTube will drive away its visitors by introducing advertising. Most people will be willing to view a short advertisement before watching a video clip, especially if the alternative is a subscription-based service that would involve monthly credit-card charges. Advertising will not be perceived as a unacceptable imposition.

YouTube might suffer a modest erosion in monthly traffic, and some content contributors might not attract advertising because their fare finds favor with a negligible demographic. On the whole, though, YouTube would survive, and I believe it can make the transition to an advertising-based business model, challenges notwithstanding.

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Executive Tinkering Shows Sun Still Trying to Assimilate StorageTek

Sun Microsystems announced today that is reorganizing its storage division, naming a new vice president to run the storage marketing operation as part of the overhaul.

The company has consolidated its tape, disk, software, storage marketing, and partner-management business units. It also has tapped its Tape Management Group vice president, Nigel Dessau, to serve as vice president of storage marketing and business operations.

It’s an indication that Sun is serious about getting its storage business firing on all cylinders, but it’s also an acknowledgment that the acquisition and assimilation of StorageTek has not gone according to the playbook.

Taylor Speculation Grows; Another Microsoft Defection to Google

As much as Microsoft would like the story to die, speculation persists about the circumstances under which Martin Taylor left the Redmond campus for the last time.

Conjecture at Mini-Microsoft’s blog suggests that Taylor might have been shown the door for having an affair with a subordinate. Other theories are floated, too, some less plausible than others. Meanwhile, Paul McNamara’s blog at NetworkWorld’s website plays up one of the theories floated on the Mini-Microsoft site, namely that Taylor might have transgressed by coining or endorsing the catchy phrase, “Hey Windows Live! Come pimp my office!”

That just doesn’t seem a likely reason for Taylor’s spontaneous combustion. If devising or approving egregiously tacky, insipidly crude advertising prose were grounds for dismissal, most of Madison Avenue would be chronically unemployed.

As inquiring minds continue to dig into how Martin Taylor became a former Microsoft executive, the blogosphere is in a veritable buzz over reports that 15-year Microsoft veteran Vic Gundotra, a general manager for platform evangelism, has agreed to join Google after spending a year working on charitable endeavors. A non-compete clause in Gundotra’s employment contract with Microsoft precludes his joining Google for a year, so Gundotra will help others while waiting for that provision to run its course. His future role at Google hasn’t been defined, but I’m sure they’ll find something for him to do.

Writing in eWeek’s Google Watch, Steve Bryant lists five prominent Microsoft employees who have defected to Google. He also lists Martin Taylor, but only to point out that Taylor left for other reasons and did not go to Google.