I upvoted you because you appear to be bringing new information to the table that I'm actually interested in, as it would shed light on how a scrappy new company succeeded despite violating "rules of the game" - not TOS, admittedly, but in this case copyright laws.

Do you have any articles or citations that show where youtube, prior to the google acquisition, ignored a DMCA takedown request? It's important to note that (in the United States at least, I can't speak for other countries), hosting copyrighted information posted by others is not a violation of copyright law, but, once you've been notified that such content exists with the appropriate DMCA request, you are required to take it down (or have the content poster respond to the DMCA request). This is known as Safe Harbor , and was, to my knowledge, the reason why google felt comfortable acquiring YouTube.