Google Has Acquired YouTube
Michael Arrington
358 comments »
Moments ago the deal was confirmed. In their largest acquisition to date, Google has acquired YouTube for $1.65 billion in an all stock transaction. Both companies have approved the deal, which should officially close in the fourth quarter. YouTube’s 65 employees will remain with the company at YouTube’s San Bruno headquarters.
Details are also emerging that Yahoo was in the bidding war until very close to the end.
Google is hosting a conference call and webcast to discuss the deal. My notes are below, and a recording of the call is here. You can also hear a replay of the call via telephone until midnight Monday, October 16 at 888-203-1112 domestically and 719-457-0820 internationally. Confirmation code for the replay is 2260624.
This went from rumor to reality incredibly fast.
My Notes from the call:
Eric Schmidt, Google’s CEO, Chad Hurley, YouTube’s CEO, David Drummond, Google’s General Counsel and others are on the call.
Eric is starting the call and immediately started talking about the content deals announced today. He says Chad Hurley and Steven Chen, YouTube’s founders, remind him of Larry and Sergey.
Chad is now talking about the reasons he agreed to be acquired by Google. He says Google’s ad platform will integrate perfectly into YouTube. Says the cultures are very similar.
Steven Chen is now talking, saying that Google’s platform combined with YouTube’s “innovative technology” is a perfect match.
Sergey say “Google’s mission is to organize the worlds information…and video is an important part of the worlds information”. Says Google’s core strength is search and advertising.
Questions just started. I’ve put myself in the queue to ask about the Fox/Myspace angle.
Mary Meeker at Morgan Stanley is first. Asking about YouTube content and how it will be integrated into Google. And how content will be monetized.
JP Morgan is asking about why all stock, and why buy YouTube when Google has its own video site. David Drummond says its a stock deal to make it tax free to YouTube shareholders. Eric says that YouTube was in a unique position and had a unique product offering that Google admired.
Question about YouTube’s new technology to auto-recognize copyrighted content.
Question about “pre-roll ads”. No real answer here. Saying they will look at all options.
Question about revenue shares given to content providers and how the company was valued. Not anwered - “we do not go into details on financial deals”. Eric is saying that deals are very good for partners. David Drummond says they arrived at a purchase price that is “very fair”.
Lots of questions on copyright issues.
ABC News question on integration between Google and YouTube. Steven Chen says they are working on a list of potential integration points, will take weeks to sort out. Sergey is saying that integration with search is going to be important, and that they will be experimenting. Eric is saying that Google Video is not going away.
Question about the bidding war for YouTube. No answer.
Great question about Chad’s statement this summer that YouTube plans to remain independent. Chad says that they will stay independent under this deal, so best of both worlds. No real way to answer this question.
That’s it. As usual with these type of calls, I wasn’t able to ask a question.
Congratulations to YouTube on this deal. I remember when I first wrote about YouTube in August of 2005 (I wrote that post from a Starbucks while on a road trip), and meeting Chad Hurley at the very first TechCrunch party.
I knew I should have put my bid in today.
Just after the bell!
Congrats to the youtube guys. Should be a nice chunk of change for them, I’d imagine
Lucky them. I wish I could something for 1million atleast lol.
poor yahoo
sell something*. Anyway, kudos to Micheal!
i wonder how much of a discount google would have gotten if they had waited a few more months. if reports were accurate that youtube spent $1M a month on bandwidth costs, then time may have been in google’s favor.
High bandwidth costs, increasing pressure to curtail copyrighted videos…google might have had some leverage over a desperate youtube months later.
how is youtube different from napster? and look what has happened to napster and other copycats once the music industry got their footing.
it’ll be interesting to see how the media giants react now that youtube has the deep pockets of google. Lawsuits 2.0?
Congrats to you Mike for breaking this story - even nailed the price! A small step for a blogger, giant leap for bloggerkind, or something.
yes, jsut after the bell !! : whover said tat .. :)-
Way to Go, miky .. you put your head on the block for this scoop !!
Mike, you and your “source” indeed rock
Kudos for getting the news out first and congrats to the YT team.
Congratulations to Yahoo on a job well done. Today is when Google jumped the shark.
I don’t think they could have waited to try and get any more of a discount. Yahoo is in a tough place with a ton of pressure given recent performance. I’m sure they would have prefered to have Youtube and would have moved quickly to get it. I think they also would have overpaid for it to let the street now they are serious about video. My guess is they will now go harder after Facebook which could end up being a mistake.
Boy, I am glad I was wrong and you were right Michael. This is awesome news!!
Google + YouTube = GooUbe [;)]!!
Congrats Google!! and YouTube Team!!!
Cheers,
Dreamchaser
http://dreamchaser.go4i.net/
I’d like to dedicate a moment to list all of the people on Mike’s case for breaking this story …
ah, well they know who they are.
Great job Mike!
Congratulations, Mike. You’ve made a piece of history!
Wow did you guys feel that, an earthquake took place after this announcement.
The money involved in this deal is dizzying. The new posterboy of the succesful post-dotcom era businesses.
This is a steal for Google at 1.65 billion!
Way to take a chance on the acquisition prediction, Mike. I definetely had my doubts especially after reading your 40% prediction. Good work ladies and gentlemen… Now let’s see a Facebook acquisition! C’mon Yahoo!, get on the ball before Google buys that too.
Google can afford $1.6 Billion . It is not as if they are buying on credit .
Ehéh. Les cons..
What exactly is an all-stock transaction? How does this work out? Do all of YouTube’s employees get actual money or what?
ZOMFG - GooTube here we come ;0
Comparing Facebook to YouTube is the most ridiculous statement of the decade.
Hey Mike and all,
I’ve posted my notes from the conference call (which just ended).
http://youmakemedia.com/2006/1.....s-youtube/
Perhaps someone can help get the correct names to my quotes?
^Response to Vik. In terms of dollar amounts it is not the most ridiculous statement of the decade. They’re both valuated in the over $1B and less than $2B.
It’ll be interesting to see how Google handles potential copyright issues from the purchase of YouTube.
From $0 to $1.65B in one year. Call Guinness…
Facebook is worthless.
Youtube is priceless.
Seriously. Anyone with a brain can see that.
Amazing prediction - Call of the year! - And that guy who is in on the first (3) comments when you first said this …. ya know the guy who said ..
- ” Is this web 2.0 or are you trying to get 100,000 visitors to your site?”
This guy is a chump, Now he is eating his own words- what a chump.
One can be thought wise even though a fool if he just keeps his mouth shut!
Great reporting, Richard Bowles
Google+YouTube=BCST
Same enterprise culture at the 2? For me Hurley and Chen are in the middle in the spectrum, while Page-Brin are on the tech savvy geek corner, and Anderson-DeWolfe form the social-networking-hub margin. Not really the same tech- and company culture, just the half.
If Google would buy Genentech for instance, that would be really cool.
Merging IT with BT, that is the future.
I hope all those who were bitching and accusing Mike about his ‘rumor’ can eat their words and shut up next time (just saw a comment ver similiar). It’s his blog, let him report or blog about what he wants. If you don’t like it, don’t read. Its rediculous. Also is bitching about advertising… again it is his blog. There was this one idiot at the Future Of Web Apps summit who every time he got the chance asked about ads how crappy they were and how they steal the ‘user’s space’. I wanted to punch that guy.
Attila..that doesnt even make sense. Although interesting, a Gene/Google pairing would be a complete disaster. 2 very different cultures and approaches to product development and risk-taking..
youtube culdn’t have landed in safer hands…if google play their cards right they could use youtube as a moneymaker and finally receive a profit this quarter!!!
What will we see as users? No change to YouTube I imagine, but perhaps a knowledge that whatever the bandwidth bill, it is not going to fold.
Unbelievable. I strongly believe that a talented UI group could have taken Google Video and re-worked it into strong competition for YouTube without the 1.65 BILLION dollar expenditure.
Well, Google will takeover the world :\. Or not :D.
One helluva scoop! I think the whole world was checkng TechCrunch for details. Great work.
Ben, who cares about a UI if there aren’t any users there to use it.
Great work on scooping this one guys.
MUST BE NICE TO SELL COPYRIGHTED CONTENT AS YOUR OWN! NOW GIVE US BACK NAPSTER O’WELL I’LL JUST STICK WITH EASYNEWS.
Has anyone done the math and figured out how long it will take google to earn back their equity selling ads on youtube?
Just to put it in perspective, if youtube earns (net profit) $1 million a day, it would take more than 4 years for google to earn back what they gave up in equity. Its possible if google can really monetize youtube’s daily video streams and pageviews. No doubt an agressive price given that youtube’s rate of growth has well peaked. Also amazed it looks to be an upfront deal, no earnouts etc. (that I’ve heard about) . . . google’s making bold moves.
I wonder what will happen to these guys
http://www.rev2.org/2006/10/09.....o-youtube/
All the gossips are closed now..
the way to go Google.
an analysis to all ups and downs of this deal:
http://googlelogs.blogspot.com
Vik’s Rumor Mill: AOL to purchase Digg.com.
This isn’t the only news to come out today from Google… As covered on my blog, Google just announced a deal with both SONY BMG and WARNER MUSIC to offer the companies’ “expansive music video collection[s] available for online streaming at no cost to users!”
To recap:
ALL MOVIES FROM SONY BMG WILL BE STREAMED VIA GOOGLE VIDEO (AND GOOGLE ADSENSE PARTNERS, *cough*cough* YOUTUBE)
WARNER MUSIC WILL ALLOW MUSIC VIDEOS, ARTIST INTERVIEWS, ETC. TO BE STREAMED FREE VIA GOOGLE VIDEO (W/ ADS) OR PURCHASED THROUGH GOOGLE FOR $1.99/video
-Kyle
Michael, don´t be humble ! You have gave the news first… Congratulations !!!
Mark Cuban was right. Google is never going to make back $1.6B in any reasonable amount of time. And no earn-out? Eric’s gone soft.
The only way Google will profit from this is by shutting down YouTube and funel the traffic to Google Video.
Repeat after me… broadcast.com
what this means - big brother Google will now watching your viewing habits and keeping it “safe” on its servers in the northwest,,,,, get the picture fellas,,, ah ha! - opened up to law enforcement or to the courts in copyright lawsuits - only under a subpeona of course!
I don’t think it will turn out all that great; I read the last part, and google is not going to kill it’s “Video” stuff…which means to me….why in the hell did they buy youTube…
it does seem more like big brother looking out for the little bro.
the real media revolution is when hardware will be free; and you get paid for hosting content after you’ve bought content…but that may be years away from now.
oh yeah…i know most of you who post and read this site are wanna-be liberals; but, media concentration is never a good thing. ClearChannel, etc.
Beginning of the end of user generated content sales
Congrats to the Youtube owners for cashing out
Flash designers/developers rejoice! This is the highest price ever paid for a Flash app.
Sure, there’s a bunch of users and content to go along with the deal but this story is as much about Flash as anything else.
Would Macromedia have been more involved?
For all the pessimists thinking Google won’t be able to make back the money, just remember this: online video is just starting out. There will come a time when being number 1 in this field will be worth much more than 1.6 billion.
Old media got scooped on this one! Well done!
so what? Who said you needed to spend 1.6 B to be #1. YT was 90% crap and didn’t make money, they would have self destructed all on their own, no VC would fund a unprofitable business forever.
The detailes and analysis of the Biggest Acquisition by Google yet:
http://googlelogs.blogspot.com.....otube.html
Since it was an all-stock transaction, this was more or less a free deal for Google.
The YouTube employees will undoubtedly have timed lock-ins to prevent their cashing out and running for at least a year, maybe more.
The only real question is whether the volume of copyright infringement lawsuits will be mangeable.
Richard Dean: You hit the nail on the head. The math just looks about as fuzzy as Yahoo’s broadcast.com acquisition. I think it might be more appropriate to say “Google’s making desperate moves.” Maybe Sergey, Larry and Eric can star in a new TV series “Desperate Acquisitions.” The fact that there’s absolutely no performance tie-in and that they plan to leave YouTube as an independent operation alongside Google Video seems to indicate that this is a deal they felt pressured to make. A lot of people think Google is a divine organization and that after all these years, despite their inability to build anything outside of search that’s dominated the market, they have some magic up their sleeve that they’re just waiting to unleash. The new products with no apparent revenue stream. The secret datacenters. Dark fiber shopping sprees. The weird acquisitions. All appear unrelated, but the Google cult insists that these “do no evil” geniuses really have a grand master plan to seamlessly integrate all these things together to bring in a new age of information enlightenment. Few want to consider that maybe, just maybe, Larry and Sergey built a really cool product at the right time and did nothing more than that.
The most interesting thing will be to see how News Corp. responds to the acquisition. MySpace Video is already overtaking YouTube in some areas according to comScore. They are definitely in a position to counter this in a number of ways. The question is if they will, and what moves they choose to make.
Daniel: you’re right. Online video may just be starting out. But nobody yet knows what type of profit margins can be made on video given that companies like YouTube will need to split revenues for licensing rights, handle rights clearing issues, etc. It also remains to be seen how YouTube’s new commercial direction will fair over the long-term with users now that it’s no longer “underground.” Lots of other video startups are out there, and the studios will do deals with any of them so long as their rights are protected to their satisfaction and they get paid. As such, it remains to be seen whether YouTube will hold its position over the long-term. Google is clearly hoping that YouTube will do for it what MySpace did for News Corp., but after reading the allegations presented by MySpace founder Brad Greenspan, if his information is legitimate, it appears fairly likely in my opinion that News Corp. had a damn good idea that it was getting a steal and that it was underpaying for MySpace. In any case, the fast rise of MySpace Video doesn’t bode well for YouTube. Just remember: if two young guys can knock out YouTube, beat out a company like Google and then sell to that company 19 months later for 10 figures, it would be stupid to think that there aren’t a bunch of other people out there right now working on projects that have the potential to be the “next big thing” and leave YouTube in the dust.
How was it? It is only Microsoft that buys there opponents and competitors out of the market. Seems like Google is now starting to behave exactly like Microsoft behaved before. Wonder if that is a good thing for Microsoft and/or a bad thing for Google?
I wrote a blog entry on the topic user-contributed media based on this acquisition - http://inthefieldonline.net/bl.....tube-hmmm/
“Sergey say “Google’s mission is to organize the worlds information…and video is an important part of the worlds information”.”
Sergey flubbed up. He meant to say “…monetize the world’s information”
Rupert Murdoch get screwed bigtime. I love it ! Only Google ( i.e. people on their BOD and perhaps some from Apple i.e. you know who ) could make this happen. Mark this as the date as the beginning of decline of MySpace and good riddins to Rupert Mr ‘Geezer’ pretender Web 2.0.
How convenient, MSN Soapbox is released to the public today as well.
My favorite YouTube video…
Dick ‘Scarface’ Cheney
http://www.youtube.com/watch?v=2DzHhbZgtfk
seriously, is this the biggest con of all time? 1.65 biiiillion, for huge bandwidth bills, a lot of users who understand the word “free”, and a solid application that converts various video formats to flash? 1.65 billion for a flash conversion utility?
Other reasons why Google acquired YouTube…
YouTube serves in excess of 100m streams per day
Telco DNA is fundamentally unsuited to the current dynamics of content
Telcos can’t innovate.
Is there any company which instills greater fear in telcos than Google?
The numbers of You Tube> http://www.lapropaladora.com.ar/?p=198
i think google got screwed too…The VC firm played them good. Lots of people at the VC firm which owned YT where from Yahoo! which was also bidding ofr YT up until the end…this is a classic, very awesome way to make money.
Any idea as to what YouTube’s revenue is?
is the g-tube gonna be a combination of google video and youtube
or will they remain seperate
40 percent beat 60 percent
http://www.techcrunch.com/2006.....ube-rumor/
I smell the envy in all you haters’ posts. The green in your nicks are quite fitting
Like any piece of copyrighted content on an ISP news server, google is a conduit for the content, not the owner/holder. All you Mark Cuban hogriders are a joke to think google will be the fall guy in some MPAA/RIAA smackdown. Do you really think that a corporation with the market cap larger than Daimler/Chrysler, GM and Ford combined won’t be able to tango legally with the **AA? Please.
That was very quick!
Google can only monetize the Youtube traffic. They can easily get back the money by slapping ads in the videos. More than that Google stock is bullish over the acquisition and I suppose this increase will pay much of the money.
You have to love this! I just bought Google the other day. This stock is going to take off. Anyone else think so?
Everyone seems to point out YouTube’s huge hosting costs as a problem with the valuation of this deal. Won’t there be synergies with googles “dark fiber” purchases and already established hosting platform? I haven’t heard anything along these lines.
Online video, storage, applications, etc., are technological disruptions, and technological disruptions don’t happen overnight. Give it some time people, Google will make the best of YouTube, and I’m sure we’ll see great things in the next 5-10 years. Everyone seems to be in a rush and expect results in a 5-10 month timeframe - get a life, advancements take time.
How can you tell if something is a technological disruption/advancement? The process is painful, but the end result is rewarding. Going to YouTube to “watch TV” might be painful, but I think the general direction is to eventually get highly customized content to TV’s via the web.
So, to all of those who say “this won’t work” - it’s a technological disruption and it’s not meant to be easy. Give it time.
And that, my friends, ended the WillVideoforFood * YOUTUBE GOES BUST POOL *
http://nalts.wordpress.com/you.....vote-here/
So I guess the new Web 2.0 sale price is 1 million times annual earnings? That’s good. Some companies only sell for 4 times earnings.
My CubeBreak makes about $50 on Adsense a month. Google- it’s yours for $600 million.
I don’t see how this will work except for the fact that Google has so much good will and money to back up YouTube that it will become more sucessful.
Other than that, I don’t see billion dollars being a good price to find out what 18-35 years olds are doing.
This reminds me about something Battelle blogged about back in early 2005:
http://battellemedia.com/archives/001404.php
An excerpt:
“We understand that video is the next holy grail,” Schmidt replied. “How many camcorder tapes do you have?”
I answered that I had no idea, but a lot, at least a box full. “If the average reasonably high income person had a hundred each, that’s millions and millions of tapes,” Schmidt said. “That certainly sounds like an unsolved problem.”
So is that it? The future of Google is – indexing your old video collection? Somehow, I figured Schimdt was being a bit disingenuous.
No wonder Google’s been doing YouTube favors in their SERPs.
Everything is possible on the internet ..
These guys were leaving off credit cards last year and now they are multi millionaires
So this is the future of the much talked about “user generated content” sites? Let’s see, we upload our stuff and…you make all the money. Right. Man, did I miss a step, I have to go over that again…I do the work, you get the money. Yes, I got that right the first time. I still don’t have any money. Let me go over that again…you get billions, I get nothing. Hmmm…I must be…an artist. Or maybe a songwriter.
Welcome back my friends to the show that never ends.
wonderful.. congrats to my buds in Y and G.
I was one of those people who gave all the people who blogged about this deal when it was still a rumour a lot of crap, but hey … lets get this straight here … when someone says that the deal has got a 40 % chance of being partially true … that is complete crap
Buth then again, good scoop Mike !
& God bless YouTube & all the videos that I love there
New York Time’s web site has just posted a very interesting article on the deal. It reveals that the “marriage proposal” (if you will) was made over a lunch on Wednesday (10/4) in a Denny’s restaurant near YouTube’s office. Here, let me just copy-and-paste from NY Times:
“The deal came together in a matter of days. After rebuffing a series of other overtures, YouTube’s founders decided to have lunch on Wednesday with Google’s co-founder, Larry Page, and its chief executive, Eric E. Schmidt. The idea of a deal had been broached a few days earlier. The setting was classic Silicon Valley start-up: a booth at Denny’s near YouTube’s headquarters in San Bruno, Calif. The Google executives threw out an offer of $1.6 billion and autonomy to continue running the business. That set off a marathon of meetings and conference calls over the next two days, which kicked into even higher gear on Friday, when news of the talks began to circulate, putting pressure on Google to sign a deal before a rival bid emerged. In fact, the News Corporation sent a letter to YouTube seeking to start talks but never received a response…”
So, Rupert Murdoch wanted to buy YouTube as well.
Good job on taking other peoples work and selling it as your own.
Muralikrishnan:
No, that is not “complete crap.”
What Mike said was, “Based on experience with these sort of rumors, I’d put this at 40% likely to be at least partially true.”
I’d say he was spot on and did an excellent job. All he had at that point was a rumor. He used his expertise, mingled with his gut, and who knows what else to give us readers a percentage to weigh whether or not there was anything like what he reported going on. I’d say he nailed it at 40% which is almost 50/50 - could go either way, but was cautious. Rather than sit on it and wait for more info, he had the cajones to publish it immediately - and I, being awake, saw it just seconds after. That’s a part of history Mike made possible for me, and I thank him for that. He has taken the high road and not addressed the scathing doubters, so I’ll do it for him: “Nah nah, na nah nah!”
Great scoop on this story TC.
Recommend checking out the video from the founder on youtube:
http://www.youtube.com/watch?v=QCVxQ_3Ejkg
They cant help but start busting up laughing at the end, wouldnt you if you just had a billion dollar payday?
biggest looser imo is Viacom, they missed out on myspace and now youtube. They are losing their stranglehold on youth culture.
So what happens to Limelight Networks (YT’s delivery partner?)
Read the complete coverage of Goog-YT deal..
Congrats YouTube!
If Yahoo were very close in the race, what will be Yahoo’s target now?
Boo hoo for Yahoo
But congrats to the Tubular dudes for becoming millionaires in such short notice…damn, I gotta pay more attention to my brain storms.
For the sake of argument: Google paid with shares, right? So in fact they did not actually CASH OUT….
Congrats for Youtube guys…. only 29 months after launching the site and they have already sold it for a fortune.
Well done guys
But if you HAD been able to ask a question, would you have chosen to:
a) Ask them if they are kings? They are. See their featured video.
b) Ask Google what on GOOGLE EARTH they’re doing buying something at nearly 1000 times earnings.
c) Ask what they’ll do about the 90 percent stolen content that feeds the community?
d) Ask how they will keep the community when other sites mimic the model and don’t come with the Google baggage?
What would you have asked?
Google will now face the biggest challenge of all. After purchasing Youtube, the music and video company will now target google to get even more money from google.
Talking about shark !!!!
There is no doubt that this is the largest move made in Google’s history. It is much more than more ad sales. It is a strategic step forward to be the category-killer of a new space with an existing brand name — beyond their dominance in Search. They will control a very important segment of content for years to come. There’s more analysis of my take on GoogTube here: http://breakoutperformance.blo.....alaxy.html . Thanks for the coverage, Eric
I think this deal is perfect for the both sides involved, for YouTube to cash in before crashing from copyright lawsuits and high bandwidth costs and for Google, because this might be the next big thing for them, serving video and multimedia contextual ads
Good for them!
Time will only tell…
hey guys i can’t get the screen name why?
i have register the free aol mail and got d success message but while using d same name n pss word i can’t get it …………. will u teach me to do ??????
The http://www.asadodo.com guys have had some fun with this. Their obituary for YouTube is up at http://asadodo.blogspot.com/20.....-2006.html.
I can’t wait to read about how “innovative” YouTube makes google because, it seems, everything google does is “innovation” even if it is just buying real innovators like any other tech company behind the curve on something.
helio - If you believe google isn’t innovative, then you need to have your head examined.
Didn’t another company get blamed for doing the same thing? Buying up innovative companies and killing the competition that way? I have a slight recollection of a anti-trust-case. Hmmm. Maybe it is just me.
Yes I am ironic. I have no problem with them buying YouTube, but it is pretty unclear to me very few discusses the similarities with Microsoft.
I said it yesterday and I’ll say it again:
This sure smells like @home buying excite. Oh Boy! Let’s grab a bunch of worthless traffic and figure out how to “monetize” it later.
First off, what advertiser will pay to be in front of “Man Gets Hit in Groin by Football”? It was a great Simpson’s episode, but no sane advertiser will ever get behind that type of user created content. Putting highly developed programming in with this crap is like parking a Mercedes in a lot full of Yugos and hoping it’s worth the same as on a lot of other Benz’. Fact is, it won’t sell.
Second, the broadcast and cable networks WILL distribute content elsewhere and already do. Fox will likely sue YouTube the next time (C) material shows up - ala Napster. Content owners only flirt with YouTube because they think it keeps distributors like Comcast honest about subscriber fees (we don’t have to rely on cable only for distribution mantra).
Third, the networks and opertors themselves will offer alternatives to YouTube that will contain better content that advertisers will want to support. None of these video portal start ups will make it…mark my words…none. Once there’s a real business there, the major players will take control. Today, they just let them test out models, so Comcast et al doesn’t have to screw with its own subscriber base. If you were Disney, do you put programming on your own site, on your current distribution partner’s site (COMCAST VOD ONLINE), or on YouTube? What a JOKE.
Fourth, if I hear anyone talk about “monetizing” again I might just barf on the spot. Can we just say “make money”. That’s what this is all about.
In sum - Google got caught up in not buying MySpace, which Ross the Sly Fox Levinsohn has already made work as a deal by getting Google to guarantee almost a $1B in ad revenue.
Let’s all be honest. YouTube is a feature in a social networking site, not a standalone business.
This deal feels really big yet the Ebay skype deal was over $2 billion
On another note you can see the video of the cofounders here:
http://digg.com/business_finan....._by_Google
RETREADED = retarded?
No offence man, while we appreciate your opinions, you couldn’t be farther off.
1) Google Video is making Google lots of money, even though it is ranked #3, which they state in the podcasts mentioned in the OP. Google is the advertising and search giant of the entire Web my friend. The advertising and searching genius of Google paired with the social aspect and massive site traffic of YouTube appears to be an extremely complimentary relationship to me.
2) Copyright may indeed be a tricky obstacle to overcome, but deals have already been arranged with some media distributers to work through the issue. A viable business model is to actually make the user-experience of an episode of Lost from ABC (for example) similar to if they watched it on television. ABC is already losing money on these episodes by pirates on Bit Torrent sites. Why wouldn’t they agree to generate some form of revenue by providing the episode to a site like YouTube or Google Video? The eventual plan is to integrate commercials into the YouTube videos.
3) I think there are plenty of companies that would want their ads to appear in a video of “Man Gets Hit in Groin by Football.” Maybe not Mercedes, but perhaps the Comedy Network, or websites such as Ebaumsworld? Maybe Red Bull? You’re thinking of advertising from the wrong perspective. If a video is receiving a million views per day, there isn’t a company in the world that wouldn’t want their product to be seen, regardless of video content. Some may pick and choose, but trust me, the spot will be filled in short order.
4) Sure, Fox has their own new television-episode streaming mode of deployment on the web. Does that mean that everyone on the web is going to watch those episodes there? No. Will people download the episodes or watch them on YouTube instead? Yes. Why wouldn’t you want to make money off your episodes viewed from another site if you had the opporunity?
5) Hindsight is 20/20. If the creators of MySpace could predict the current landscape of online social networking sites along with the amount of money Fox is making off their site currently, they would have held out for a much better deal. Wasn’t there a recent article posted on Tech Crunch about the de Wolfe guy claiming that he got ripped off, stating that Fox has made about $20B off MySpace so far? I might be wrong there, but if it’s true, trading $500M for $20B just makes good business sense from Fox’s pov.
6) YouTube definitely has the potential to be a standalone business once it benefits from the search and ad resources of Google. If you can’t see that, it probably explains why you’re sitting around badmouthing what appears to be a sweet deal for everyone involved instead of making millions with your own amazing business concepts.
/dismiss
Web design with video integration. Social networking site development is our specalisation,
Will Google Video be aligned with Google YouTube. Are they not over-lapping.
HEY! Now, that is cool stuff….
Just got a quick question: does anyone know what made YouTube succeed (eg take off in such a short period) while the other 100+ video services just sat there?
For the LIFE of me, I can’t figure it out. What made YT different? Same thing with MySpace?
There has GOT to be a common theme btw these sites that just blow up and the ones that just flounder?
Anyone know? Someone has got to know the answer out there…
PollPub.com today just released a new feature that lets you make polls using YouTube video. It’s easy and free, and uses the YouTube API to make it really simple.
Here’s a sample Video Poll:
http://www.pollpub.com/which-l.....nnier.aspx
Good Article
It makes more sense than you think.
The cost of an additional 67 employees and YouTubes infrastructure is insubstantial to Google.
The transaction was done entirely with stock- so no cash is needed.
And 100M video hits have a lot of value- the CPM is much higher than text or banners.
Seems like a pretty simple decision to make.
Steve Lerner, Practice Leader, Content Delivery and Hosting
RampRate Sourcing Advisors / Strategic Research
steve@ramprate.com
http://www.ramprate.com
Here is my take. I think the main motive behind the acquisition is more towards video ad revenue rather than information accessibility. However, they had to pay a really high price for that along with many loopholes such as legal liability from copyright holders that could wipe out YouTube from existence like Napster. Another issue, is that copyright law is quite vague in terms of online interpretations and that could play a major role in Google’s legal liability. So, I would suggest that Google and YouTube spend some real time and money trying to convince these copyright holders to establish partnerships with them as they have with Universal and Sony. On another front, they are going to also motivate yahoo and microsoft to start advancing in their video services as well as possible acquisitions. If this becomes succesful, yahoo and msn are going to feel the pain of not taking action of acquiring youtube. Well, it is really the choices and the actions we take that really determine the success. Lets wait and see.
“The beauty of YouTube is that it takes entertainment out of the hands of morons in suits and puts it into the hands of morons in sweats.”
YouTube BEST !
Google is really getting into the video side of things with first the release of their own video search engine and now with the acquiring of YouTube, Google will grow even faster as a company as a whole. I am wondering what percent of people think that Google’s Acquistion of YouTube Is A Positive One in this Online Pole:
http://www34.brinkster.com/bad.....ve_One.htm
anyone know how much share does VC have in youtube before acquisition?
i guess its a good thing that google has purchased yuotube.i think they can run it more efficiently.
anyaways you guys can save youtube videos on a site called http://www.KeepV.com.
google ain’t shit. Google is a little company that has a search engine on the net.
most programmers know google was started by two fags that are from califronia.
Most wannabes like search engine associates have no clue howe the net is run.
i want to go to myspace.com
hi!
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Visit often updated site of funny Youtube videso : http://www.youtubevideos.biz
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