Google Acquires YouTube

[\/\/illy]

Google Acquires YouTube

Internet giant buys online video leviathan for $1.65 billion in stock

By: Jason Hahn

Google acquired video-sharing giant YouTube on Monday for $1.65 billion in stock, confirming rumors that surfaced over the weekend.

The landmark deal involves two of the biggest brand names on the Web today, and will have various implications in terms of online videos, copyright issues, and advertising opportunities, among other aspects.

"The YouTube team has built an exciting and powerful media platform that complements Google's mission to organize the world's information and make it universally accessible and useful," said Eric Schmidt, Chief Executive Officer of Google. "Our companies share similar values; we both always put our users first and are committed to innovating to improve their experience. Together, we are natural partners to offer a compelling media entertainment service to users, content owners and advertisers."

In a Webcast, Schmidt also noted that he saw similarities between YouTube's co-founders, Chad Hurley and Steven Chen, and Google's co-founders, Larry Page and Sergey Brin.

"Our community has played a vital role in changing the way that people consume media, creating a new clip culture. By joining forces with Google, we can benefit from its global reach and technology leadership to deliver a more comprehensive entertainment experience for our users and to create new opportunities for our partners," said Hurley.

The deal capped off a busy Monday for both companies, as Google notched video content and revenue-sharing deals with Warner Music Group and Sony BMG Music that gave the company the right to show its users music videos, behind-the-scenes clips, artist interviews, and other artist-related videos at no cost to the user, courtesy of its ad-supported model.

YouTube also inked similar deals with Universal Music Group, Sony BMG, and CBS. The site also hashed out a deal with Warner Music Group in late September.

One of the obstacles that many saw as a hindrance to YouTube's long-term viability was the threat of copyright lawsuits it might have faced in the future. It was this reason that led Internet entrepreneur and Dallas Mavericks owner Mark Cuban to say that whoever bought YouTube would be a "moron" for doing so.

Analysts indicated that Google did not have reason to worry so much about that threat because of its deep pockets. The acquisition seems to lend a temporary solution to YouTube's potential copyright woes, as it now has a wealthy "big brother" in Google.

The acquisition also puts to rest any worries about YouTube being able to turn a profit.

Integration will be the main concern from here on out, as Google will try to enhance the video search experience that YouTube will be able to provide its users, and as YouTube will function as another advertising outlet for Google.

YouTube will retain its operational independence, as well as its strong brand identity.

The deal is expected to close in the fourth quarter of 2006.

[bouche]

and so the nightmare begins

[Birdy]

that's a hefty paycheque for a what... 20 month venture?!

[SmoothedShredder]

TV on the Internet... Why didn't I think of that!

Be nice to nerds. Your going to work for one someday.

[The Chameleon]

and so the nightmare begins

Yeah this is the real issue here: Youtube was a little start up and not a publicly traded company so it could get away with all the copywrighted material on there for free.

Now that Google a mega giant and publicly traded company has bought it, the copywright isses will flood in. I imagine Youtube will become a bit less atttractive with all the copywrited material removed.

[Dr_Evil_Mouse]

Glad I could capture as much of it as I have.

[bouche]

Unless Google has something up their sleeve to distance them (I can't imagine what), they're big pockets are certainly attractive to copyright holders.

As mentioned, a startup that is in debt isn't worth anything to a lawsuit.

[Dr_Evil_Mouse]

Note to self: remain in debt, remain inconspicuous.