Universally loathed by employers for its time-wasting potential and loved by everyone who likes looking at kittens behaving crazily, YouTube celebrated its fifth birthday earlier this week. In internet years that's a relatively long time but the website is in its prime. It gets two billion views a day, and some 24 hours of video are uploaded to the site every minute. Like those other two internet behemoths Google and Facebook, its name has become a verb: you Google your train times, you ask your friend to Facebook you later and if you miss a prime piece of telly such as Sky's News's Adam Boulton almost coming to blows with Alastair Campbell post-UK elections, you can still YouTube it.

The site has given the world some spectacular nuggets of entertainment over the last five years, such as 2008's 'Rickrolling', an April Fool joke that directed millions of people to the video for Rick Astley's 1987 hit 'Never Gonna Give You Up' (giving the singer's career a new lease of life), and 'The Evolution of Dance', a six-minute clip in which comedian Judson Laipply dances his way through a variety of styles from the robot to the twist (it currently has 139 million views). Anything involving people falling over or babies and animals being cute is hugely popular; 'Charlie Bit My Finger', in which a one-year-old attacks his older brother's finger, has a record 169 million views, and Maru, the Japanese cat who loves jumping into boxes, is one of YouTube's most popular personalities ever. It has made Scottish singer Susan Boyle a star and it launched the career of current teen sensation Justin Bieber.

Of course, as Geek.com points out, it's become so much more than a clearing house for kitten videos. Nor is it merely a showcase for Miley Cyrus and Timbaland videos, both of whom are in the Top 10 most viewed videos of all time. It was pivotal in the coverage of 2005's Hurricane Katrina, and its content now includes documentaries and feature films from Hollywood studios and independent filmmakers. Yet, while it might be the chosen medium through which Queen Elizabeth addresses her subjects via the Royal channel, it still has far more home-produced stuff than copyrighted or professional content. But however ubiquitous it is now, before YouTube's arrival in 2005, there was no easy and quick way for your average punter to post videos online. The website was the brainchild of three young Paypal workers, Chad Hurley, Steve Chen and Jawed Karim, and internet legend has it that the idea came to them after a dinner party, when they had problems sharing online a video they'd shot. The first YouTube video ever was a 19-second clip called 'Meet Me at the Zoo', featuring Karim standing in front of two elephants at San Diego Zoo. It paved the way for an internet revolution.

"YouTube finally made video acceptable. Almost 10% of web traffic is now video and most of that came with YouTube," Irish communication consultant Damian Mulley says. "It made a very text-orientated web into a more full-bodied multimedia. It's a fantastic discovery tool in that you'll type something into YouTube and find something, and be led onto something else, and then something else again. It's almost like a slot machine for entertainment."

From its modest enough beginnings in offices over a pizza place in San Mateo, California, the start-up grew rapidly, and just a year after its launch the site was receiving one million views a day. In October 2006, Google acquired YouTube for $1.65m in Google shares, and although the site is not yet profitable (estimates for its running costs range from anywhere between $83m and $380m a year), the internet giant has longer-term plans to monetise the site properly. Current revenue comes from display advertising and sponsorship of pages.

In 2008, YouTube reached an agreement with MGM, CBS and others, allowing companies to post full-length films and TV shows on the site (videos uploaded by standard account holders are 10 minutes long). That year it also started streaming all 60 matches of cricket's Indian Premier League, the first free online broadcast of a sporting event. Ultimately YouTube's aim is to reach a point where it is consumed in the same way as television. The challenge is that, currently, an average YouTube viewer only spends 15 minutes on the site in one sitting. The consensus is that YouTube will need to increase its output of quality professional content in order to keep visitors on the site longer, attract greater ad revenue and compete with the older medium.

Of course it hasn't been five years of plain sailing for YouTube. The issue of copyright is an ongoing problem. Although YouTube will remove a video upon the request of a copyright holder, organisations like the English Premier League and Viacom have filed lawsuits against it for failing to prevent their material being uploaded. And, as ever, there's the threat of a young and cooler usurper taking its place, in much the same way that Facebook killed MySpace. But right now, YouTube is entitled to be in celebratory mood as the figures clearly indicate how many people are following its motto of 'broadcast yourself'.

And however sophisticated its content becomes, it's telling that 'Charlie Bit My Finger' remains the most viewed video of all time. "It's great to see that videos of laughing babies or cats doing stupid things are outdoing professional content that people have spent an awful lot of money on. It just shows that what people like is not what professional TV studios think people will like," says Damien Mulley.

Hero or villain? Youtube

High: Now getting more than two billion views a day

Low: Currently being sued for $1bn by Viacom for copyright infringement