YouTube: Overnight success has sparked a backlash

Along the way the video sharing website became an internet phenomenon. The figures are astonishing. More than 200 million videos are watched every day on the site and 10 hours of new content posted on it every minute.

One commentator once remarked that it is so ubiquitous that "if it's not on YouTube, it's like it never happened".

For the uninitiated, YouTube, slogan Broadcast Yourself, is a sort of video vox populi. Its estimated 34 million registered users can "upload" their favourite video clips onto the site and thus broadcast them to the world.

Their "user generated content" is not just home movies but clips of their favourite TV shows, films, sporting events and music videos.

It is so successful that it is estimated the single site uses as much online memory space as the entire internet did in 2000. Its most popular clip, a music video by Avril Lavigne, received more than 90 million hits.

Inevitably such success has sparked a backlash. Programme makers and the music industry have complained about mass piracy and only this week MPs in Britain called for greater safeguards of the site and its "dark side".

With all this fuss it is hard to believe YouTube is still in its infancy.

Hurley and Chen, and another friend Jawad Karim, all colleagues at PayPal, the internet payment service, had the idea after getting frustrated when they tried to swap videoclips from a dinner party in February 2005.

At the dinner, hosted by Chen, a Taiwanese born computer science student from the University of Illinois, they spent most of the evening shooting videos and digital photos of each other.

The next day they easily uploaded the photos to the Web. But the videos? Not a chance.

The trio had stumbled across a gaping niche. And between them, they had the means to address it.

Chen and Karim, who subsequently left to continue studying, were exceptional computer programmers, and Hurley, a Fine Art graduate from Indiana University of Pennsylvania, had a gift for design to give a new website a compelling look.

Financed on their credit cards and based in a garage in San Francisco, the first YouTube video, an 18-second clip posted on April 23, 2005, featured Karim standing before elephants at a zoo.

"The cool thing about these guys is that they have really, really, really long trunks," he said. "And that's cool. And that's pretty much all."

With that breakthrough, YouTube was born.

Days later, the three opened their website to the public. Word of mouth did the rest and YouTube grew at enormous speed.

The need to buy ever more powerful computer hardware soon outstripped the founders' credit cards and they sought backing from outside investors.

But they were determined to do it on their own terms and were adamant there would be no intrusive advertising on their site.

Ultimately it was a stroke of genius, immediately setting them apart from their fledgling competitors whose sites were dominated by sponsors, pop-up adverts and mini commercials.

Once when they imposed on users with a small text ad on the site they jokingly apologised, explaining they needed the cash to fix the office sink.

Users flocked to their website, considering it to be anti-establishment and independent.

The business now had 67 employees and was operating from a loft above a pizza shop in San Bruno, a city just outside San Francisco.

It was so successful that even internet giants such as MySpace and Google flailed in its wake, their own versions of video sharing failing to gain a foothold.

In August 2006, Google decided if you cannot beat them, buy them.

David Drummond, Google's top lawyer who directs the company's mergers activity, talked to Chen and Hurley about everything from an advertising partnership to an outright acquisition.

Hurley and Chen had said publicly YouTube should stay independent. But they lacked the computing and communication power to match their growth. Those needs fitted Google's strengths.

Between the YouTube owners, Chen was more eager to sell. "Chad kept saying, 'We're going to take this as far as we can take it.' Steve was like, 'Let's get the money now,'" said a friend.

The deal was finally signed in October 2006 at a branch of the diner Denny's 20 miles from their office.

Chen, now 29 and single, and Hurley, 31 and a married father-of-two, would remain in charge. Karim, also a University of Illinois alum, had left YouTube soon after its founding to pursue his graduate degree at Stanford University.

In return they were given £874million in Google shares and celebrated with a burger at their local TGI Friday's.

At the time, Chen said he was overawed with the success

"I'm definitely floored by everything that has happened, but I haven't come to terms with the full ramifications of it," he said.

He described the feeling as cerebral jet lag, his brain struggling to catch up with how fast his life had changed.

Such phenomenal success inevitably reaped a backlash. And the site has been attacked on a number of fronts mainly for failure to police its content correctly.

Though site rules prohibit pornography, nudity, defamation, harassment, commercial advertisements and material encouraging criminal conduct, critics argue they are still all over the site.

Organisations including the US entertainment corporation Viacom and the English Premier League have issued lawsuits against YouTube, claiming that it has done too little to prevent the uploading of copyrighted material.

The former claimed $1billion (£529million) in damages after it discovered 150,000 unauthorised clips on the site which had been viewed more than a billion times.

Perhaps more damaging is the use of the site to post distasteful home movies like "Happy Slapping" where beatings and bullying are filmed and cruelty to animals, Holocaust denial and the Hillsborough Disaster, in which 96 football fans from Liverpool were crushed to death in 1989.

Most disturbing is the claim that a video showing a rape has been posted on the site.

MPs in Britain this week attacked the "dark side" of YouTube and called for greater safeguards and the use of 18 ratings to stop children downloading inappropriate material.

Chen and Hurley argue it is impossible for them to police everything that is on the site and they rely on users to follow the rules and report any breaches. Once "inappropriate content" is discovered it is removed, they insist.

YouTube is now so powerful that many movie and music organisations have launched tie ups with them. For many now getting their latest song or trailer on Youtube is better than it being played on mainstream television.

Not bad for a three year-old company that according to Google reports has yet to turn a profit.