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It attracts a lot of viewers, but can "user-generated" video make money?
"STARBUCKS has comfy chairs, but they don't charge people for sitting in them," says Tom McInerney, the boss and co-founder of Guba, an internet-video company. Instead, he explains, Starbucks provides a comfortable environment, at considerable expense, so that people will buy overpriced coffee. That, in essence, is the business model being pursued by websites that host "user-generated content" such as personal blogs, photographs and today's craze, amateur videos, which can be uploaded and watched on sites such as YouTube, Google Video, MySpace, Guba, Veoh and Metacafe. By offering a setting for free interaction, such sites provide the online equivalent of comfy chairs. The trouble is that, so far, there is no equivalent of the overpriced coffee that brings in the money and pays the bills.
That is why people like Chad Hurley and Steven Chen (pictured), the co-founders of YouTube, the clear leader of the pack by audience size, are casting around for a business...