YouTube goes to…Google!
earlier today, Google’s press-center confirmed what probably will be this years hottest and most controversial aquistion in IT-land: YouTube, 65 employees strong and searching for a business-model in business for less than 2 years, was sold to Google in an $1.65 billion all stock transaction (TechCruch has more details). besides the self-evident decision to continue the YouTube-brand (raising the question about the future of Google’s very own Video-service), details on the deal haven’t been disclosed. however, Google not only bought the worlds fastest growing website, but a plethora of possible IP-lawsuits against YouTube (read Mark Cuban’s post) as well. now that YouTube is owned by someone actually worth suing, it’s probably only a matter of time until the media-companies go to court. anyway, congratulations to Chad Hurley and Steven Chen, founders of YouTube!
Will YouTube become to Google what Broadcast.com was to Yahoo, an expensive acquisition with questionable returns? Of course, 1.6 Billion would be a bargain for Google compared to the 5 Billion that Yahoo! squandered on Bcast and even though as a former employee I benefited from that merger the result was a company fractured without a coherent strategy for on-line media delivery.
In talking about the deal, Forrester Research analyst Josh Bernoff was quoted as saying “But Google also could present a solution”, indicating that Google might be able to develop automated systems to block unauthorized use of copyrighted materials. In addition, if there is a technology whereby ads can be placed alongside specific types of content that does not offend, that would be a significant achievement to a current concern on the part of advertisers.
What is different with YouTube verses Napster 1.0 is they have courted media firms to try to resolve copyright issues, which was not the tactic Napster pursued. In addition, the industry has matured and more are on-line with their own video content and see the potential for reaching eyeballs. It is no wonder then that large players such as Fox and NBC have reversed course as of late with respect to their content being used on-line.
Interestingly the man who benefited so nicely from the Yahoo! deal, Mark Cuban had stark words for YouTube, saying among other things “Take away all the copyrighted material and you take away most of Youtube’s traffic. YouTube turns into a hosting company with a limited video portal”.
Of course, Cuban was clear to indicate that he made a prediction, “but that doesn’t mean I don’t like ‘em”.