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Now starring on the Internet: YouTube.com

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SAN MATEO, Calif. -- Internet video sensation YouTube.com seems like a startup straight out of Silicon Valley typecasting.

A year ago, co-founders Chad Hurley and Steve Chen were in between jobs, a pair of twentysomething geeks running up big credit card debts as they tooled around a garage trying to develop an easy way for people to share homemade videos on the Web.

Now they're flirting with fame and fortune, budding media moguls in a new entertainment era that relies on unconventional channels like YouTube -- a site that's cultivated a huge audience while testing the bounds of creativity, monotony, copyrights and obscenity.

"We are providing a stage where everyone can participate and everyone can be seen," said Hurley, 29. "We see ourselves as a combination of 'America's Funniest Home Videos' and 'Entertainment Tonight."'

Having graduated from Hurley's garage to a small office above a pizzeria, San Mateo-based YouTube is capitalizing on society's shortening attention span and growing exhibitionism to establish itself as a window into popular culture.

It's become an outlet for sharing everything from amateur videos made by teenagers goofing off to slick productions posted by the likes of Nike Inc. (NYSE: NIK), MC Hammer and the director of the upcoming movie "Superman Returns" to drum up demand for their products.

Meanwhile, the buzz keeps getting louder.

As April began, Hurley said people were posting about 35,000 new videos daily at YouTube.com, luring even more viewers to an audience that's already watching more than 35 million videos per day, most of which last between 30 seconds and 2 1/2 minutes. Just four months ago, YouTube's visitors were posting about 8,000 videos a day while viewers were seeing 3 million videos daily.

The growth has been infectious, depending largely on referrals from users who alert their friends and family to a favorite video. Many of the viewers who discovered the site then decided to share their own videos, a factor that continually deepens YouTube's pool of content.

YouTube's success also is being propelled by a steady increase in high-speed Internet connections at home, making the distribution and consumption of online video more convenient and practical.

Internet powerhouses like Google Inc. (Nasdaq: GOOG) and Yahoo Inc. (Nasdaq: YHOO) and upstarts like Break.com and Metacafe.com are all trying to capitalize on the rising popularity of online video, but the intensifying competition doesn't faze Hurley.

"We are at the forefront of this cultural shift," he said. "They are all going to be chasing us."

Many observers liken YouTube to MySpace.com, the hip Internet hangout for teens and young adults that was snapped up last year by Rupert Murdoch's News Corp. (NYSE: NWS) for $580 million. YouTube drew much of its early audience from MySpace members looking for a place to share their videos.

Others see potentially troublesome similarities between YouTube and the original Napster file-sharing service that made it easy to download free music. It was sued and eventually shut down for rampant copyright violations.

Like Napster, YouTube is totally free. It is also filled with video cribbed from TV shows and movies -- clips that violate copyrights.

YouTube "has a strong position right now, but we'll have to see how much staying power it really has," said Mary Hodder, chief executive of Dabble.com, a startup offering a way to track all the video cropping up on the Web. "You can't help but wonder whether YouTube will eventually lose its audience the way Napster did."

In some cases, the copyright violations on YouTube have helped boost the popularity of segments originally aired on television. For example, a short "Saturday Night Live" spoof of two men rapping about their Sunday plans to see a movie rapping attracted widespread attention on YouTube before NBC demanded that it be removed. YouTube promptly complied, as it does with all copyright requests, and the spoof is now featured on NBC.com.

YouTube hasn't been sued yet and so far Hollywood studios have described the company as a "good corporate citizen."

Hurley and Chen hope to work more closely with copyright holders to convince them they can stimulate more interest in their material by sharing snippets on YouTube. That message seems to be resonating. Some movie studios are now posting clips on YouTube as part of their marketing campaigns.

In a nod to copyrights, YouTube recently imposed a 10-minute limit on all videos, figuring that time restriction will lessen the likelihood of massive infringement.

Not much has slowed YouTube since last May, when Chen debuted the site's first video -- a clip of his cat, "Pajamas," pawing at a dangling string.

In February, YouTube attracted 9 million unique U.S. visitors, ranking it just behind MSN Video (9.3 million visitors)and ahead of Google Video (6.3 million visitors), according to Nielsen/NetRatings Inc.

In a more telling indication of video supremacy, YouTube's U.S. visitors viewed 176 million pages in February while the video audiences at MSN and Google viewed 38 million and 76 million pages, respectively, Nielsen/NetRatings said.

The next major test for YouTube figures to come during the next few months, when Hurley and Chen hope to make money by selling video ads on the site. For now, the 25-employee company is subsisting on $11.5 million invested by Sequoia Capital, the same Menlo Park venture capital firm that helped launch Google.

Much like Google with its search engine, YouTube conceivably could display ads hawking a product or service related to whatever video is being watched. The company already is talking to a convenience store chain about an advertising campaign that might launch in June.

YouTube's advertising aspirations might increase pressure to prevent pornographic videos from popping up on the site. Posting porn on the site violates YouTube's policy, but that hasn't stopped abuses. Depending largely on complaints from its users, YouTube aggressively removes offending material, but not before thousands of people watch the videos.

During a recent tour of YouTube, The Associated Press found videos of strip-teasing women as well as clips of graphic sex scenes promoting other pornographic sites.

Besides scaring off advertisers, YouTube's vulnerability to porn risks infuriating parents if they discover that sexually explicit videos are accessible to minors frequenting the site, said Greg Kostello, chief executive of vMix, one of the many video sites trying to catch up to YouTube. Kostello said he also has found videos of violent beheadings on YouTube. Unlike YouTube, Kostello said vMix uses filters to keep out pornography and other inappropriate material.

"I can't imagine my kids coming to a site and seeing some of the porn and hateful commentary that shows up on YouTube on an almost daily basis," said Kostello, a former executive with Vivendi-Universal. "And if you are an advertiser, you aren't going to be happy if porn shows up by one of your ads."

YouTube already posts warnings that the site isn't intended to be viewed by anyone under 13 years old.

Hurley and Chen believe their community policing system is highly effective, pointing to similar practices used by online auctioneer eBay Inc. (Nasdaq: EBAY) and Internet advertising service Craigslist. YouTube's technology also blocks repeat offenders from posting videos.

Chen, 27, figures YouTube still has time to work out the kinks. "It's kind of scary to think about, but it will probably be another nine months before this idea really hits the mainstream."

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