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YouTube was founded in February 2005 by Chad Hurley, Steve Chen, and Jawed Karim. It is is a social web site that allows users to upload, view, and share video clips. The company employs 50 people in San Mateo (near San Franciso) California. YouTube uses Adobe Flash to serve its content, which includes clips from films and television programs, music videos, and homemade videos. Video feeds of YouTube videos can also be easily embedded on blogs and other websites. YouTube prohibits the posting of copyrighted video by anyone but the copyright holder; however, restriction of copyrighted material has proven difficult. The three founders of YouTube were all early employees of PayPal. The site's popularity surged in December 2005 when it hosted the Lazy Sunday clip from the NBC’s Saturday Night Live broadcast. Lazy Sunday became hugely popular among Internet communities for its memorable one-liners in a hip-hop parody based on the Chronicles of Narnia. In February this year, the NBC asked YouTube to remove Lazy Sunday and other copyrighted video clips. However, by June 2006, NBC had radically reconsidered its approach to YouTube; now the two companies have announced a strategic partnership. Under the terms of the partnership, NBC will create an official NBC Channel on YouTube to showcase its preview clips for The Office. YouTube will also promote NBC's videos throughout its site.
Copyright remains a major problem for YouTube. Their policy does not allow content to be uploaded by anyone other than the copyright holder. They remove videos that infringe on copyrights, but a large amount of copyrighted material is uploaded nonetheless. These are typically only discovered when they are reported by the YouTube community, or when the copyright holder reports them. Others have questioned whether they have a viable business model. The site was founded on $11.5 million in venture capital but didn't gain any revenue until March, when they cautiously began selling ads. The site's bandwidth costs, which increase every time a visitor clicks on a video, may be approaching $1 million a month--much of which goes to provider Limelight Networks.
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