Peter Kafka

Recent Posts by Peter Kafka

Who Got the Loot? How YouTube Split Up Google’s Billions.

Google’s $1.65 billion purchase of YouTube is perhaps the best-known transaction of the Web 2.0 era. Here, via court documents filed in the YouTube-Viacom case, is how some of that money got split up:

  • $516 million to Sequoia Capital, which invested $9 million in the company
  • $334 million to co-founder Chad Hurley
  • $301 million to co-founder Steve Chen
  • $85 million to Artis Capital, which invested $3 million
  • $66 million to co-founder Jawed Karim

These numbers are all from documents filed by Viacom (VIA); they also indicate that five other YouTube employees received shares worth a total of $33.4 million.

Bear in mind that these numbers are based on the closing price of Google’s stock on Nov. 13, 2006. Google (GOOG) shares have bounced around dramatically since then, so the actual value of the payout could vary quite a bit depending on when–or whether–recipients sold their shares.

Why is any of this relevant to the case? Viacom’s suggestion is that YouTube’s employees and investors were focused on a big payout and wanted to build the company quickly–and that they were willing to accept copyright violations if that helped them achieve their goal. Again, not sure if this will matter in the court’s eyes.

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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work