Besting the 800 lb gorilla of the new media space–Pipedream or something palpable with a little dose of the right strategy? We tend to side with the latter. Youtube, the current darling of the user-generated web, has grown so dramatically over the past year due in large part to:

• - The obvious network effect of embedded viral videos scattered across the web (The Paypal mafia guys get viral!)
• - Some $20mm+ injection in capital from Sequoia
• - First to market with platform-agnostic real time conversion to flash from any imported video format
• - A healthy hint of PR, controversy and the chitter chatter of the blogosphere
• - Riding the coattails of the Myspace effect

As they say, first you get the money (Sequoia’s injection of oodles of capital to sustain the $1mm+/mo burn rate of bandwidth and servers), then you get the power (the eyeballs necessary to make you the fastest growing site on the net over the past year and the ability to launch the hopes and dreams of the next joe looking for their 15 minutes of fame online), and then you get the women (the list of media and web powerhouses willing to cough up the purported $1.5 billion to have a piece of you). Of course, it’s all nice and dandy, but Youtube really made it because their financiers afforded them the ability to offer their endusers a great, fast loading viewing experience as they scaled.

At this time, Youtube still hasnt made a deep connection with their core audience, the Myspace demographic, who compose 70-80% of their overall traffic base. And while besting a triumvirate of Stanford hacks who were nurtured by the Paypal mafia (Levchin, Thiel and Sacks) and have Mr. moneybags willing to let them dive into their coffers for a few million dineros at whim is no easy feat, we’ve got the grittiness, web savvy and hunger to fight with the lions and win. We saw something similar when the much more seasoned and web savvy team at Myspace (previously the guys who ran the barrel of fun that was Intermix Media) trounced Friendster a few years back in the social networking space even though Friendster was launched well over 12-18 months prior to Myspace. Youtube can be beat, as much as others may find this implausible — all it takes is finding a model which allows for the hockey stick growth to more closely inch towards a 90 degree (or one which outstrips Youtube’s current rate of traffic growth). In closing, if there’s anyone out there who’d love to take Youtube on, and win, you know how to get in touch with us.