The story of this is actually pretty interesting. Everyone had been tryign to do video-on-demand and failing, basically. Including Google. Google had a product called Google Video that failed pretty spectacularly.

Youtube came along and was basically spending money like there was no tomorrow. Well, for the time. It's nothing compared to the current crop of AI companies. So with Youtube, everybody was terrified of the bandwidth costs, with good reason. The cost to build a sufficient network was exorbitant using off-the-shelf hardware.

Google runs their own networking hardware and servers at the efficiency level at the time that was unprecedented. They measure things in a unit called PUE (power unit effectiveness). That's basically how many Watts each Watt of computing power cost. Things like cooling would eat that up. Typical data centers at the time were at like 1.5-2. Google's own data centers were more like 1.1. Google was actually lying and saying it was 1.2 and people didn't believe it was that low. The best Google data centers are I believe more like 1.05-1.08 now. Passing cooling and that sort of thing contributes to this.

So Google of anyone had the cost controls on computing power and and networking like nobody else. And Youtube was burning VC cash. That's why they got it so "cheap".

This still created huge problems for Google and as Youtube continued to grow it was heavily impacting national ISPs, peering connections and the like. When Youtube was acquired they came up with a bandaid solution (called Bandaid) where they bought commercial server racks from Dell and elsewhere and loaded their own software on them. They would give them to big ISPs. The software would locally cache the most popular Youtube videos to cut on the ISP's bandwidth costs and the latency. I believe that this temporary solution became permanent and continues to this day.

Nobody could monetize Youtube like Google either as in nobody else has a remotely comparable ad infrastructure and ecosystem.

And lastly, nobody could encode video like Google could. Nobody else had access to that much computing power and could use it as efficiently. That was a huge deal because the encoding requirements are massive.

So yes, it was an amazing acquisition but I think if anyone else at the time bought it, they would've failed.