Tech notes

Dec 21 2006 By Herb Kim, The Journal

For the past 18 months, the current new-media tour de force - YouTube - has been growing at an astonishing rate, recently prompting web giant Google to buy it for an incredible $1.65bn.

So, our timing couldn't have been better when Lee Duddell, the head of digital media at Codeworks, and I were invited to see Chad Hurley, CEO of YouTube (among many others) speaking at the Forbes Media, Entertainment and Technology Conference in Los Angeles, just a few weeks after Google's acquisition announcement.

In case you haven't visited it, YouTube is a website where you can watch video clips uploaded by other users (whether it's a man shooting a firework from his backside or an interview with a 94-year-old Second World War veteran).

YouTube, which employs just 60 people, is one of the new wave of "Web 2.0" websites that make use of user-generated content (videos, diaries, photos, etc created by web users themselves).

It's a wonderful business model: you set up a website and put your feet up as the public upload their content. This generates masses of web traffic (72 million visitors per month for YouTube), which in turn generates investor interest - and then hey presto! A mammoth investor like Google steps in.

Aside from the very-pleased-indeed-looking YouTube founder, the conference was bursting at the seams with web stars - including actor Morgan Freeman (who revealed he's started his own internet TV company); Brad Grey, CEO of Paramount Pictures; Barry Diller, owner of Expedia; Phil Rosedale, CEO of Second Life (perhaps the next YouTube) and senior execs from the likes of Google and Yahoo.

Surrounded by this vortex of money, fame and power, I feared the worst. Would we be taken seriously? Would anyone even listen to what we had to say?

My fears were unfounded. I was heartened to find the folks at this conference understood our goal of driving digital innovation in the North-East - and they were keen to engage. They were interested and surprised to learn that the North-East is home to the UK's most valuable software company, Sage, and that 10% of the UK's games development workforce lives here.

And they were particularly keen to hear about the Web 2.0 propositions we're currently developing at Codeworks and about regional technology companies such as Software Development Associates and market intelligence firm Rocket Science.

We arrived home with business cards representing £5bn in investor capital and believe we'll be able to turn some of this interest in North-East propositions into actual investment before long.

Coming up with a model like YouTube's is no easy task, but there's still much to play for. And the world is waiting to see what the North-East has to offer.

Herb Kim is CEO of Codeworks, the North-East's centre of digital excellence.