It's no secret that YouTube needs to make money; its annual losses have been estimated at between $175 million and $471 million. Meanwhile, Hulu may have already matched the ad revenue of YouTube, which is twice Hulu's age, thanks to old-media-friendly content.

The more completely Google breaks with YouTube's past, the easier it will be for CEO Eric Schmidt to cozy up to the movie and TV studios from his new house in Southern California. Who knows, the Hollywood honchos might even forget they once sued the guy.

And departed Silicon Alley Insider reporter Michael Learmonth wasn't entirely wrong in his article saying that Google had nixed the idea. Google and YouTube won't necessarily be offering live streaming video to users of the site any time soon. Why, when the search advertising company is already stuck subsidizing YouTube and venture capitalists are happy to continue subsidizing sites like Justin.tv and Ustream with their own money?

A friend who's a contractor says Steve Chen is building a tech-heavy penthouse on the top floor of the Ritz-Carlton. Lots of video screens and stuff. That's all I know.

I'm just guessing that this isn't in the neoclassical Ritz-Carlton hotel on Nob Hill, but in the residential apartments built atop the old de Young building that's managed by Ritz-Carlton. When Chen is all moved in, I imagine mid-Market penthouse neighbors Mayer and Al Gore dropping by, the latter with a stern lecture on the importance of climate change and the former with a box of cupcakes. (Photo by Allan Ferguson)

YouTube execs estimated that if just 10 percent of the service's users took advantage of live streaming, the company would have to add 20 to 25 percent to its huge server and bandwidth infrastructure to support it.

Sounds like another sign that YouTube's popularity, while giving it a great position in the market, has become something of an Achilles' heel — every video played, every user added cost the company money, and neither creators or consumers are paying. Advertisers are only interested in a small percentage of videos on the site, and YouTube can't even sell all of that inventory. So adding new features such as live streams or improving quality would only serve to dig Google's $1.65 billion money pit even deeper. The episode is enlightening in one regard, though. It demonstrates how much influence YouTube's founders have at the company — little to none.

(Photo by Ben Cooper

Nonsense. How typically self-important of Internet users, to think that Viacom cares about the dozens of South Park videos they watched. Viacom is not being disingenuous in saying it never meant to violate Internet users' privacy, I've come to believe.

So why are they seeking the data? The case revolves around the Digital Millennium Copyright Act, which gives Internet service providers a "safe harbor" for hosting copyrighted content. But that protection rests on the notion that the people who operate a website don't really know what's on it.

If Viacom can show YouTube cofounders Chad Hurley and Steve Chen, or other top officials, viewed copyrighted content while logged into the site, wouldn't that weaken YouTube's rights under the DMCA? Even worse, what if Hurley or Chen uploaded copyrighted clips themselves?

Tellingly, in reaching a deal to protect YouTube users' privacy, Viacom and Google excluded data about YouTube and Google employees' use of the site.

Google's best defense might be to go negative, airing reports about Viacom executives' use of the site. That might not give YouTube any more legal protection — but it would make its legal foes squirm. Viacom's Ifilm subsidiary, for one, has been caught hosting copyrighted content without permission.

There's one thing that might save Chad and Steve: They've never seemed that interested in online video. The pair, both former PayPal employees, stumbled onto the idea, and conceived of YouTube first as a site to host shopping videos for eBay listings, then as a video-dating site. They've always been more interested in cynically exploiting online video as a business than exploring the potential of the medium. An announcement of Google's sale to YouTube is one of the few times the two actually made an appearance on it.

So there's the irony: The less Chad and Steve used YouTube, the more likely they'll come out of this lawsuit unscathed. But Viacom's legal strategy suggests that every video they viewed will count against them.

Previously:

• A is for Adelson, who cofounded Digg

Normal quality:

Higher quality:

The full-screen comparison isn't exactly startling. Here's a detail that makes the distinction clearer.

Michael Siebel, Justin.tv:

Justin.tv is the biggest live video startup with the most traffic, the most registered users, and the best community. But it wasn't easy to get to the top spot. There are many hard problems to building and scaling a live video site and Yahoo Live is going through those pains currently. I think YouTube will face similar challenges.

YouTube's reported plans to move into live video is important validation for the market and will bring more awareness to the ways live video is changing the way people access media online. Ustream.TV has been singularly focused on live video broadcasting for more than a year now, and has built a large base of regular, compelling broadcasters who use our simple, reliable and robust platform to stream compelling, event-based content to a broad range of audiences across the globe, many of which weren't before privy to such media. Our growth is further evidenced by the traction we have gained through partnerships with leading companies such as Veoh, Digg, Sun Microsystems, the Republican National Convention, Bebo and others; the 200,000 broadcasters and millions of viewers that are now using our site regularly, and the daily growth we continue to experience. We welcome YouTube to this growing market and are glad that even more consumers will have access to great live video content.

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The insular crowd, however, all but ensured I'd meet up with Ghosts of Valleywag Past. No, not a spectral Nick Douglas or a scary Nick Denton — but other people I've read about, or written about. That vaguely familiar girl chatting with Jeremy Stoppelman? Oh! It's his ex-girlfriend Liza, reportedly the center of love triangle involving Valley good-time-guy Sean Parker. There's Steve Chen, the YouTube founder, with spiky hair and glasses, holding hands with his girlfriend while bidding Stoppelman adieu. Over there, by the bar, is Ooma CEO Andrew Frame, wearing a form-fitting leather jacket and sporting bangs. Bangs? Really? And Keith Rabois, the ex-PayPaler now at Slide, with the controversial Stanford history.

Then I met Snocap founder Jordan Mendelson, whose appearance with a bevy of beauties at last year's Yelp party lead us to crown him the Valley's newest bad boy. Boy did we peg him wrong. My first thought, after taking in his supreme untallness, was that he seemed like such a nice guy. And so unassuming. The expression of smug self-satisfaction in last year's pictures was missing. As was, apparently, his job.

I asked about Snocap, the troubled music startup he founded with Shawn Fanning, whom he worked with at Napster. Mendelson confirmed our rumor that he had left for another project. So, was he going to indulge his Valleywag-created persona and party hearty all night? Sadly, no. Mendelson begged off early during the afterparty at Mr. Smith's, in order to prepare for a venture meeting today. The bad boys are growing up — or at least learning when they need to put on appearances.

"YouTube is an illicit organization built upon a self-destructive philosophy," Lodwick writes, calling Youtube's copyright policies "evil." Now that YouTube is owned by don't-be-evil Google, those are fighting words.

Lodwick also mocks YouTube founders Steve Chen and Chad Hurley for managing to upload all of two videos the past year. Lodwick himself uploads videos every couple of minutes. And, if you're into publicity stunts — like the one about the Vimeo employee who met the girl of his dreams on the subway and then created a Web site to find her — they can be entertaining.

But Lodwick has to understand, Chen and Hurley are much to busy counting to 1.65 billion to make videos about televised fights with their girlfriends.

The above has been called categorically stupid by Jakob Lodwick, founder of Vimeo, a video sharing service that provides HD video, as well as a normal quality higher than YouTube's:

Seriously, if anyone can make a YouTube channel work, it's Winfrey. Her show grabs 5 million viewers a day, and presumably some of them have computers. On the other hand, her past Web performance does not bode well for the venture. The last Oprah foray onto the web was the Oxygen cable-net/website which imploded and was sold off to NBC Universal, long after Winfrey had backed out of the venture.