Google Acquired YouTube…

Google Inc. announced the acquisition of YouTube for $1.65 billion in all stock-for-stock transaction. The deal was confirmed in a Google’s press release after Michael Arrington filled up the whole homepage of his blog with Google-YouTube rumors and …

The three things Google can do to make YouTube worth billions…

As you’ve probably heard, Google has bought Youtube.
There has been a lot of talk about this on the web over the past few days. Now that the deal is done, some people are just glad it’s over. Om Malik still thinks it’s not a good ide…

In the Wake of GooTube…

In the wake of the recent GooTube
deal, there have been lots of ramblings—both positive
and negative—going on …

GNC-2006-10-10 #206…

Listener hot line comments Galore! Call the comment line today to get in on the 2 years podcasting giveaway on the next show. Yep this Podcast turns 2 on the next show. Sponsors: [Save 15% on any order of $20…

So how much now for Facebook? Do we think Yahoo will have them by the end of the week?

Om, I was a firm believer that YT could not go the IPO route, as many rumours over the last few months would have had us believe.

The Google acquisition probably proves it was not IPO material due to copyright concerns.

However, the Google acquisition makes plenty of sense. Google provides YT with the muscle, credibility and ability to come to terms with the media giants. In fact, I’m certain that Google tested the waters by speaking to some of the big players and would bet on seeing some news to this effect over the next 90 days.

Thoughts?

Best,
George

I agree with George that YouTube was not IPO material, but I think Google could potentially face copyright issues. They need to figure out a way to stop users from putting out copyrighted videos on YouTube.

it’s not that bad. Founders have done a great plan. Google is king advertising sales around content Youtube is king in video content.
So it might not be bad for the user afterall, the user will probably get a better search kick back

Google is brilliant!

Om, just cut out sugar and enriched flour. You’ll be down 40 in a year.

I think this safetly locks them out of Facebook, not that they were ever a contender for Facebook.

This could cause Yahoo or Microsoft to start getting friendly with facebook now that they don’t have Youtube to consider.

Arun, you can bet that Google already has some plans to address this and it probably involves:

• a revenue split of the ads that will now appear on YT

• official content deals that help the giants promote their programming

I just don’t see Google making this acquisition and making itself the instant “deep pocket” without having tested the waters first.

Best,
George

Don’t lose too much weight because someone is squatting on MegaOM.com!

Sucks that you have to lose the 40lbs. But it’ll probably be good for you. Remember to drink water instead of soda. And you can still drink, but try to cut the carbs down. Hell, drinking will still make you feel better.

Still, I would have been a loser with you.

It’ll be interesting to see how this shakes out. I still think there’s an avalanche of lawsuits waiting to be unleashed now that Google has the pursestrings.

Sorry, folks. It’s Thanksgiving up here in Canada. Om reported this morning that many content deals had already been announced:

“In addition to their reported “marathon negotiations over the weekend,” YouTube and Google were also working in parallel on the content licensing front, with announcements today that YouTube had signed the recalcitrant Universal11, as well as Sony BMG12 and CBS13, while Google had picked up Sony and Warner Music Group14 (with whom YouTube already has a deal15). The deals mainly allow legal use of labels’ music and music video content.”

Best,
George

It’s a ton of dough, but it’s no ebay-Skype - this will actually make some money.

Be on the watch for another Sequoia backed company Admob in the mobile advertising space.

This is a huge milestone for Flash developers. Flash pros are the biggest winners since this is basically a Flash app with a bunch of users. Adobe wins too. :)

Congratulations to YouTube and Google on the acquisition.

I agree with what Eric Schmidt said in his conference call, that “This is just the beginning of an Internet video revolution”. Again, in that same call, Google said that YouTube was “one of the many” acquisitions that they will make in online video. The YouTube acquisition simply confirms high value for innovative video and rich media companies that are nimble and innovative. So, we will see Google and other companies looking for video tool vendors, content aggregators and community plays that dovetail well with their current offerings.

I believe that YouTube media deals were instrumental in completing the acquisition by Google. Similarly, vMix has content related deals with Sony, Fox, Warner Brothers, MGM and Discovery Channel and as well as attracting original content from programs like Borat, Family Guy, Meerkat Manner, The Tyra Show and Project Runway. Content is still King and the ability to work well with media companies is critical in this new media space.

There is only one YouTube and they are now off the market. We should see more early stage acquisitions and investments as the established media and Internet companies look to capitalize on the online video growth.

I still think Mark Cuban is right. Now that the entertainment cartel has a deep pocket to use (i.e. Google), they will. They were just waiting for the deep pocket idiot to roll by and buy YouTube.

Re: losing 40 pounds, I recommend taking a look at The Hacker’s Diet by Autodesk founder John Walker. It’s a diet plan as written by an engineer - straight and refreshingly to the point:

(link)

The subtitle is “how to lose weight and hair through stress and poor nutrition.”

Google’s strategic mistake!

I don’t see how this can work out that badly for Google. All they have to do is set aside a few $B for an exit plan in which they come to some sort of consent decree to pay X $B in damages and exit the user posted video business. Might as well risk those billions while you have them. The ridiculous stock multiples don’t last for ever, so it’s either risk a few $B now or lose $100B as soon as growth slows.

it is the distraction factor jesse which is going to be an issue. the copyright issues and all those other problems are going to strain google where it is weakest - management and control. i think it is basically that issue. imagine the chagrin of google employees who are ready to quit now to start their own companies because there is not that much upside to their stock.

Om,

As Nick Hawkins pointed out, you can drink all you want…just steer clear of beer (low-carb kind OK once in a while) and mixed drinks.

:)

Cynthia B.

I’m doing 20 kms on an exercise bike every night while reading or watching tv, and I’m down about 15 lbs in 3 weeks. I have a protein shake afterward, and at breakfast, and I find I’m eating less too.

Hey if I can do it so can you. :)

A smart move of Google’s. They create another opportunity to increase ad revenue, and also tempting the competition to folow Google’s footsteps into the “Internet video revolution”. That will further cripple Yahoo’s and Microsoft’s market position.

However, long term this is bad for both Google, industry and the society. Whether we see a monopoly in making, or it’s reincarnation of .com craze, the outcome isn’t something I’m looking forward to.

Considering how overpriced Google is and that this is an all stock deal, this isn’t nearly the rip-off that skype was.

We’re doing an experiment on a collaboratively filtered realtime discussion. Please join us to the following discussion:

TOPIC: google youtube

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(In some companies a proxy login dialog box will appear. You then need to type your company internet username and password).

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om,

i think you should tape your daily workouts and meals and post them on youtube in an effort t add a “healthy lifestyle” show to your growing media empire

fred

From way out in left field… might this move be confirmation that Google is building a monster network to serve all these bandwidth-hogging goodies? I can think of a few nets, say AT&T and Comcast, that will balk at giving this gorilla a free ride. Battle of the TV 2.0 titans is next.

Om, I think it is too early to declare winners or losers. Well, there are some early winners or losers but mergers like this take years to play out.

Could YouTube fizzle like Skype at eBay? Will Google be sued? Will another competitor emerge that is better than YouTube? Too early to tell.

I wrote a bog exploring all of this today. (link) nextbigthing/2006/10/lessonsfrom_th.html

Since this was an all stock deal, not a bad way to spend some funny money on a ton of eyeballs. Valuable video eyeballs.

The real story here is the future threat to the old MSO/Satellite video distribution model.

In the million channel universe, IPGs and set top boxes are your pappy’s Oldmobile TV. Good luck finding anything you want to watch beyond standard bearers. Consumers are frustrated already.

Content providers want to widen their grasp as well. Hard to do with so much noise, so many sources of content. Notice how we went from ABC alone to all networks streaming shows online in a year.

So, run the clock forward to TVs with built-in browsers and broadband connections. Turn on your TV, and bammo blammo, personalized content right on your GoogleTV “IPG.” Basically, any IP-connected video device can become an outlet for content. Then watch the players line up to get on GooTube.

Yeah, yeah…I know…QoS, security, yada yada yada. Those things always catch up and follow the money. When all those infrastructure challenges match old skool TV in capabilities, watch out.

Just because it happened doesn’t mean that Cuban was wrong. He is not an idiot (jackass maybe, well, jackass) but he is not stupid.

losing 40 lbs is very EASY OM…just buy some Level3 with me and puke your 40 off every time they dive in price…anyway you cut the waist line, Level3 is the LEANEST MEANEST VIDEO machine out there now that Google is the SUGAR DADDY to YouTube and YouTube is hooked to Level3 transmissions=======Video is King and Crowe just proved his fantasy that Bandwidth GROWS and GROWS!
Skibare

I firmly believe this is insane to pay 1.65 billion for this, its too much. Google lawyers will be busy. This is the fisrt time google has bought something on this scale, it will be interesting how they take this challenge. I think this cost is more about not letting the competitors grab this opportunity, like what yahoo did with flickr, del.icio.us and news corp with myspace.

You forgot one winner -

techMeme :)

So what will happen to Google Video and it’s player ? shutdown -s -c[Om's comment] -t[time, when ?]

I may be biased, but I think that this is a good deal for both companies. The space is just starting, and will be huge, and YouTube is clearly an icon.

Most sincere congratulations to Chad and company.

Dmitry Shapiro
CEO
Veoh Networks, Inc.

Wonder what is going to happen of the google video guys. First time I can thik of google firing people of not delivering..

I listened to the webconference earlier today and there infact was a question on the future of Goog video and the reply was a strong “goog video is not gonna be scrapped” message.

A very smart move by Google. YouTube is more disruptive than many think, not just in the internet space, but traditional media in general. This puts Microsoft and Y! back on their heels.

this is a smart move on the part of google and cuban is the moron. youtube ranks #10 in terms of traffic today on alexa. google ranks #3 and myspace comes in at #6. several analysts pegged myspace with a value of $20B this week. even cutting that in half to $10B the youtube purchase by google is a friggin bargain. if anyone is naieve enough to think that google didn’t know exactly what was happening with regards to youtube’s discussion with studios or any other original content producer whose content may appear on youtube is a moron too. they knew exactly what was happening and what the impact would be and they hoodwinked the studio’s etc in a couple ways. they worked in parallel to get their similar deals done while knowing the exact same thing was happening in san mateo. the other sneaky deal is that the underlying value of tv, radio, print is that they provide a platform for advertisers to reach their audience. the fact that google is building an isp somewhat on the DL is a big FU to the tradional media in the sense that the 4th Network has a broader audience with the ability to zero in on a particular subset and be able to do that in real time while testing what works and what doesnt work in the realm of advertising. with the traditional media, that isn’t possible. trust me, when google launches the isp and everyone can get free broadband they will add and build applications and allow for everyone to add and build applications creating an ecosystem akin to salesforce’s app exchange but with 1M X the scale by virtue of the numbers of people connected. it will be the global village marshal mccluhan(i’m sure i spelled that incorrectly but oh well) envisioned back when he coined the term. this was the same vision that laid the ground work for @home network but a slew of things f’d that up.

GoogTube will be Google’s Second Act. Although dominant in Search, they cannot rest on their laurels and needed to move into an adjacent yet complementary space as the category-killer. I believe that Shona Brown has helped their thinking significantly in driving this deal. I write more in my recent post: (link) thanks, Eric

Good luck with the forty pounds, but I still stand by you, its a bad deal. Wonder what will become of google video?

eBay definitely paid too much for Skype. Google for YouTube - we’ll see…

Om,

I think that this is a great acquisition for Google. The evolution from a text-based web to video-powered one is huge. The contextual power, reach and attention-consuming goodness of social networking is proven. Google goes from also ran to leader in one, player in the other.

Literally overnight, every company that had looked at the online video space as a “novelty with no dollars”, the “next Napster crash and burn” or “not ready for prime time,” has to re-calculate. A major land grab has just begun.

I wrote a post on this called, “GoogleTube: what it all means…” Check it out if interested:

(link)

Best,

Mark

vSocial: Say it with Video (http://www.vsocial.com)

Awesome deal. I’m placing my bet on Metacafe next.

Om, I would ALWAYS bet on a google web deal over a person losing 40 pounds.

However, I will bet I can lose 20 by 2007 and help you lose 40 pounds following a few simple rules. If you want some support for your health goal… let me know ;-)

Otherwise, good read on the .com kings…

Chris

How about some pictures to prove the deal? An I’m not talking about Google-YouTube here. If you make a deal, you need to make sure the deal sticks. Before and after pictures would be great! Loosing 40 pounds won’t be easy, let me tell you that much! I hope you will be going to a gym.

Cheers,

b

Google may be looking at some advanced options for monetizing YouTube. But short-term, this is a perfect fit with their existing model.

By all credible accounts I can find, YouTube is by far the most-visited video-sharing site, and a top ten most-visited site overall. Here’s how I expect Google to get a quick ROI on their YouTube purchase:
1. Insert their AdWords products into the user experience, like the Ads by Google on the right-hand side of KnoxViews. But Google also already serves several other flavors of ads.

1. Integrate YouTube content into Google results, feeding traffing from one Google property to another.

2. Create and revise deals with media companies like NBC Universal (they already have deals with many for Google Video). If both companies are smart, this will be a no-cash deal… Google will get rights to show clips of shows, and integrate links from the clips directlly to the show page so that media companies get traffic (and therefore, pageviews and resulting advertising). YouTube becomes the online promotional aggregator. This would benefit NBC and other media because these clips become the television equivalent of theatrical trailers for TV shows.

3. Move it’s Google Video platform onto YouTube’s, and ditch Google Video, which doesn’t seem to be getting much traction anyway. This transition would include using Google’s video search product on YouTube, allowing Google to continually refine and improve this appliance.

4. Bring YouTube’s video advertising unit into the Google fold, and begin to insert ads at the beginning of the videos in the same way that c|net does.

It will cost relatively very little to accomplish most of this. In short order and with very little outlay beyond the purchase price, Google will have substantially increased the inventory for their existing advertising products, cut a money-sucking business (Google Video), create new ad inventory units, and own a platform for further development of an important future market (video delivery and search).

The fact that they are not paying any cash is huge. If they are smart, this can be a really great deal for both Google and YouTube.

I’ve seen both ‘Goobe’ and ‘GooTube’ monikers used to describe yesterday’s merger.

However, ‘GoogTube’ confers more hype and seems much more bubbly.

Peter W.

I like your analogy to Skype-Ebay. I’d add Del.icio.us-Yahoo and Hotmail-Microsoft into the mix too. Seems like Google’s purchasing a value-added-feature rather than a revenue stream.

What troubles me is the significant IP litigation Google’s exposed themselves to. Whereas sueing Youtube for copyright infringement (and there were probably some trademark-infringing clips as well) wouldn’t have been worth the attorney fees, Google is a ripe target for such lawsuits.

I’m certain that Google’s attorneys have foreseen this near-certainty, and that they’ve probably got indemnity clauses against infringements which have already transpired, but a copyright-compliant Youtube represents a drastic change in what Youtube is. Fred Wilson faulted Google video for a delay between uploading and posting (likely for copyright checking) - won’t Google have to institute such measures on the new Youtube?

Om, before starting your hard liquor and exercise bike diet, you may want to consult Jeremy Zawodny (Richard Simmons 2.0) :

(link)

A couple of thoughts…

-Google is now the deep pockets Hollywood has been looking for
-Video, and its content, is not searchable like text and does not leverage Google’s search engine strength
-Yes, Google can use the traffic to promote its toolbar, and thus its core business, but that’s probably not worth the price it paid
-Overall, I don’t think it was a good deal. Fortune’s recent article on Google talks a lot about what Google’s strategy, throw it on the wall and see if it sticks, but there doesn’t seem to been any cohesion to it. I think Google’s next strength will be free online apps, supported by its ads, not buying the YouTubes of world.