Kelvin Hui’s latest article is titled “How to Lose Billions Dollars by Investing on Video Websites?” [Article]


Kelvin Hui’s latest article:

How to Lose Billions Dollars by Investing on Video Websites?

‘YouTube’ dream really burns out billions dollars in the venture capital industry.

In 2006, we all knew video websites are very hot. The peak was happening when YouTube was acquired by Google. It was around September 2006.

A: It’s too good to be true! It seems I can make billions if I build a video site!

B: How can you make money there?

A: Google will buy it. Or maybe Yahoo? I dunno

It was the real conversation happened in Mainland China. In 2006, no less than 300 video websites were started up. They cost over billions dollars (USD).

The hard fact is, today, only 5 major video websites are still alive. How many video sites can make money? I dunno. Right now none of them can go to local or foreign stock exchange. Itâ??s impossible for me to track their earnings.

1. http://www.ku6.com/

2. http://www.youku.com/

3. http://6.cn/

4. http://www.56.com/

5. http://www.tudou.com/

How about Google? Can YouTube contribute revenue?

I personally think YouTube alone cannot contribute positive cashflow. However it can be a good feature for the business body of Google to hold the traffic (visitors). I know Google can bring people from YouTube to its own features.

Compared to Google, the local Chinese video sites, they are not lucky enough. They still burn a lot of money to surivive. Revenue? Who knows?

In this startup game, I think the winner is the local ISP, not the websites in China.

Similar case may happen to Facebook & Twitter. Without a strong revenue model, the only choice for surivival is to be acquired by the big dogs in the industry.

For small business owners like you and me, this game is really not our cup of tea.

*This news post was submitted by Kelvin Hui.

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