YouTube Takes Stage at Media Summit

Chad Hurley, left, CEO of YouTube, Inc., smiles during an interview, Wednesday, July 12, 2006, at the annual Allen & Co. media conference in Sun Valley, Idaho. Just 17 months ago, Hurley was squirrelled away in a Silicon Valley garage running up a credit card debt as he and his business partner developed the quirkly Internet video site that became YouTube Inc. Now Hurley has become one of the star attractions at an elite media conference in Idaho, where the 29-year-old entrepreneur is seizing upon the attention to turn his San Mateo, Calif.-based startup into entertainment and advertising hub. (AP Photo/Elaine Thompson) (Elaine Thompson - AP)

During a wide-ranging conversation that could be heard by several reporters working in the room, Moonves seemed to become increasingly intrigued as he learned more about YouTube's rapid evolution.

Moonves marveled when Hurley informed him that YouTube's steadily expanding audience is now watching about 100 million videos per day. He asked how YouTube might be able to direct more traffic to Web sites owned by CBS. The meeting ended with Moonves concluding that CBS should start posting daily snippets of its programming on YouTube.

If CBS forges a formal agreement with YouTube, it would mark the Web site's second endorsement from a major television network in less than three weeks. In late June, NBC announced it would share some of its programming on YouTube as well as buy some advertising on the Web site.

"That was a big, key moment in our history," Hurley said of NBC's stamp of approval.

Now Hurley may face his biggest challenge _ proving that YouTube can attract enough advertising to become profitable. The 52-employee company has so far been subsisting on $11.5 million in venture capital.

The tremendous buzz surrounding YouTube doesn't necessarily mean big-spending advertisers will follow, said IDC analyst Greg Ireland. "YouTube absolutely has a great story to tell, but will that be enough to close deals with advertisers?" Ireland said.

The analyst believes many conservative advertisers may shy away from YouTube for fear of having one of their messages appear next to the racy and vulgar videos that occasionally pop up on the site.

YouTube also runs the risk of alienating its audience if more advertising fills the Web site, a factor that could drive traffic to the many other rivals building video libraries.

Hurley is confident YouTube will prove the skeptics wrong. Just last week, Walt Disney Co. ran ads promoting the "Pirates of the Caribbean" movie sequel throughout YouTube's Web site for an entire day _ the first time an advertiser had gone to such lengths.

This week's media conference has provided Hurley with a prime opportunity to recruit other major advertisers to YouTube. The CEOs of two major retailers, Wal-Mart Stores Inc. and Home Depot Inc., are expected to show up before the conference ends.

Hurley also is hoping to meet with Nike Inc. Chairman Phil Knight, who told the AP he wants to make it happen.

"It's phenomenal," Knight said of YouTube. "I absolutely think there is a place for it (in advertising budgets)."

Both Hurley and Krikorian will have a chance to make another positive impression Saturday when they are scheduled to make presentations.

Hurley said he hopes to educate the conference participants about the potential of online video.

When he describes the $200 Slingbox, the 38-year-old Krikorian will have a slightly different agenda _ one he hopes will strike a chord with profit-driven executives. "I want every single person in this place to buy a Slingbox," he said.