Speaking from YouTube “world headquarters” as Google CEO Eric Schmidt dubbed it at the start of the call, Schmidt, Google founders Sergey Brin and Larry Page, YouTube founders Chad Hurley and Steve Chen. Theme of the day: Steve and Chad are Google Guys 2.0. and Google’s expertise will help them fulfill their promise.
— Schmidt immediately brandished the content deals announced this morning by both companies — five total — “… which, in my view, highlight the growing value that content owners place on the internet asa new channel to distribute and promote their work. This acquisition is an exciting exciting next step in terms of our thinking about the evolution of the internet in video and it’s one of many investments that Google will be making to make sure that video has its proper place … on the internet worldwide.”
— Schmidt, who now gets to mentor another garage band, on the YouTube founders: “Chad and Steve remind me of Sergey and Larry when I first came to Google and I say that with great affection.” He called them “the perfect example of the people we like to work with” and said, “the think that tipped us over was not the great business success of YouTube or its good working relationships, but, in fact, how the vision of serviing their end users was exactly the same as Larry and Sergey’s vision in founding Google.”
— Why Google: Hurley: “By joining forces with Google we’ll be able to sharpen our focus on this vision to create a new media platform for consumers and partners to distribute their media worldwide.”
— Why all stock: David Drummond, general counsel, Google: The deal was structured this way to make it tax-free for YouTube shareholders. It also made the deal cheaper for Google. Schmidt added during that part of the discussion as he looked arounf world HQ, that “the YouTube had not spent very much money; they have been very. very thrifty.” (Don’t think he was referri9ng to bandwidth, though.) No details on the financials as in how the valuation was reached but Drummond said it was modeled on just about every model you could imagine. He said he thought the price was fair and a good value.
– Google Video stays: Asked why Google would need YouTube when it has Google Video, Schmidt said the company’s own video service is doing well, has good content relationships and is being more integrated with the company but they were drawn to YouTube’s social media aspects: “That’s what really drove us to begin the conversation.” As for Google Video, he said, Google video doesn’t go away now or ever. It’s going to become even more integrated with Google overall.
— Merger or purchase: Brin described the deal as a “merger.” Brin described YouTube as part of “a new class of sites tjhat have really developed very quickly, are very successful and are very attractive to users and are obviously delivering a lot of value.”
— No name change: Schmidt: “No name change. We think the brand has value and we want to preserve that.”
— On copyright: Hurley and Chen gave a brief description of the new content ID technology; Chen said he hoped to begin using it next month. Hurley said they’ve always respected rights. Drummond said both companies rely on the safe harbor of the DMCA.
— On advertising: Hurley said YouTube would be exploring a lot of options, including using Google’s advanced ad technology.
— Other bidders: As Hurley seemed to explain it, YouTube really wasn’t for sale until they decided it should be. No real answer about why they couldn’t have made a similarly independent deal with other companies.
— Schmidt: “This is the next step in the evolution of the internet. It (video’s) a natural next step.” In a way, this reminded me of the New York Times Company’s acquisition of About.com, which gave it much needed SEO technology. Google wants YouTube to provide that extra edge in video to become as dominant globally in video as it is in search.
You can download the audio here (10.4 MB, 22:51 mins). Or you can stream it here … click on the arrow: