YouTube co-founders got more than double what BusinessWeek predicted

Chad Hurley and Steve Chen, who founded YouTube, filed plans yesterday to sell 3.2 million shares of Google Inc. (Nasdaq:GOOG) , which acquired the video-sharing service in November. You didn't have to be much of a psychic to see this one coming.

The jury is still out on whether Google overpaid for a company that hasn't made a nickel in profit or made the savviest acquisition in the history business. So far, YouTube seems to be worth the considerable headaches it's causing the Mountain View, Calif.-based company.

Fights over copyrighted material will be worked out. Competitors will emerge, but like with Google they will have a tough time. Once someone's media habits are established, they are really hard to change. A competitive video-sharing site will need to be orders of magnitude better than YouTube if it stands a chance.

But thanks to YouTube, every entrepreneur in Silicon Valley thinks their money-losing venture is worth 10 times more than it was before the Google acquisition was announced. The media hasn't helped much either. A much-derided story in BusinessWeek called "Valley Boys" made the case that every company connected to that awful buzzword Web 2.0., such as the article-rating site Digg, was worth big money.

"So far, Digg is breaking even on an estimated $3 million annually in revenues," the story said. "Nonetheless, people in the know say Digg is easily worth $200 million."

That math may sound dubious and sourcing a bit murky , but that same article said that YouTube "could easily fetch $500 million." That prediction made in August was way off. Three months later, Google bought YouTube for $1.65 billion.