In what has to be one of the most often-quoted comments about an Internet company, billionaire basketball-team owner Mark Cuban said in 2006 that “only a moron would buy YouTube.” Within a matter of months, of course, Google paid $1.65-billion for the company that Mark said would undoubtedly be “sued into oblivion.” And was YouTube sued into oblivion? No. So by my count, that means our billionaire media analyst has been wrong at least twice on the topic of YouTube.
So has the Dancing With The Stars hoofer ever admitted that he was wrong? Not on your life. In fact, he’s now telling Silicon Alley Insider that YouTube has only become a success because it started following his advice, which was to focus on legitimate content that could be monetized through advertising. But even in his email to Nicholas Carlson he gets YouTube and the true nature of its business wrong: he says that the user-generated content side of the company is probably “losing its ass” and that “If they get out of the UGC business, they actually would be profitable.”
As usual, Mark misses the point: the user-generated content — the video clips of startled hamsters and surprised panda bears and Charlie biting his brother’s finger — are exactly what draw the audiences that generate the pageviews that YouTube monetizes through ads on other content. As YouTube has described in a somewhat defensive post on its blog, the business is doing quite well now, thank you very much, despite repeated claims by people like Cuban that bandwidth costs and/or lawsuits would bankrupt the company. Don’t quit your day job, Mark.