TELECOM Digest OnLine - Sorted: YouTube Founders Split $650 Million Payday from Google

YouTube Founders Split $650 Million Payday from Google

Eric Auchard, Reuters (
Wed, 07 Feb 2007 21:12:02 -0600

By Eric Auchard

Two of YouTube's founders stand to divide shares of stock now valued
at around $650 million, Web search leader Google Inc. said in a
regulatory filing on Wednesday detailing the payout from its $1.65
billion acquisition.

Chad Hurley, chief executive of the online video sharing phenomenon
YouTube, received 694,087 of Google common stock worth around $326
million, according to the U.S. Securities and Exchange Commission

Co-founder Steve Chen received Google common stock valued at a similar
amount, including 625,366 shares directly owned and another 68,721
shares held in a trust.

Sequoia Capital, the sole venture capital backer of YouTube, stands to
receive around $442 million in Google shares based on the $470.01
closing price of the Web search leader on Wednesday.

At least two dozen YouTube employees received lesser share
amounts. For example, Julie Supan, YouTube's principal spokeswoman,
received 10,308 shares worth around $4.8 million.

Most of the remaining shares were divided up among dozens of limited
partner investors in Sequoia Capital.


These include a who's who of the endowments of Harvard, Yale, Brown,
Columbia, Oxford and other elite colleges, and the investment vehicles
of the families behind the Getty, Hewlett-Packard and Intel fortunes,
among other beneficiaries.

The third co-founder, Jawed Karim, received stock valued at around
$64.6 million. After starting the company in early 2005, he backed out
and returned to Stanford University to work on a graduate degree in
computer science.

The three co-founders had met while working together at online
payments company PayPal, which was later acquired by Web auction
company eBay Inc..

Google, of Mountain View, California, acquired YouTube, which is now
located in Brisbane, near San Francisco, in November of last year.

YouTube enjoyed explosive growth during 2006 among viewers eager to
watch short-form comic sketches created by other users. But its also
has faced mounting legal threats from big media companies angry that
the site has become a popular means of pirating their television

Google had said at the time of the deal's closing three months ago
that one-eighth of the equity, or around $200 million, would be held
in escrow as security on unspecified indemnification obligations.

Last week, Viacom Inc., owner of MTV Networks and several popular
comedy programs often pirated by YouTube fans, demanded that the
Google unit take down some 100,000 video clips of Viacom programming.

Copyright 2007 Reuters Limited.

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