MoneyWatch Tech

YouTube Blows Up For Google (In A Good Way)

By Michael Hickins

Updated on: September 17, 2009 / 1:40 PM EDT / MoneyWatch

A new feature on YouTube is blowing some customers away, creating the potential for incremental revenues while validating Google's community-oriented strategy.

One of YouTube's challenges in competing with the likes of Web-video purveyor Hulu was supposed to be the difficulty of convincing advertisers to place their ads in conjunction with unpredictable user-generated content. Now, however, Google has turned this challenge into a significant advantage by creating tools for users to make their content more creative -- and compelling -- than ever. Talk about turning the tables.

The feature, developed by Google engineer Michael Fink during his so-called "20 percent" time, allows contributors to add overlay texts and hyperlinks directly onto their YouTube videos, thus giving viewers a way to interact directly with the videos. Some examples of this:

an online guitar lesson where the video is overlaid with text explaining fingering;
an interactive video game where users determine the next moves of protagonists; and
a promotional video by an ad agency (showing a campaign for Ruby Tuesday based on "accidentally" blowing up the wrong restaurant).

Some of these uses are purely for fun, others have commercial potential. Chris Dale, a spokesman for YouTube, told me that after releasing the feature to users, "the community took it to a level we never thought possible."

The repercussions (I love these explosive analogies!) go beyond a unique user experience -- there's nothing particularly innovative about an interactive game in and of itself -- and speaks instead to the broader appeal of user-generated content. This feature could evolve in several directions: individual users spending more time on YouTube because of the interactive features, and more commercial users creating more appealing marketing content for their potential customers.

Either way, I don't see how Hulu can compete with this head on; while YouTube has shown surprising flexibility by creating premium channels and feature movie rentals to quarantine some content for the benefit of its more skittish advertisers, Hulu has yet to create appealing channels for user-generated content.