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GOOG Buys YouTube
Brett_Tabke

WebmasterWorld Administrator brett_tabke us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 3114679 posted 9:13 pm on Oct 9, 2006 (gmt 0)

[news.yahoo.com...]

Google Inc. is snapping up YouTube Inc. for $1.65 billion in a deal that catapults the Internet search leader to a starring role in the online video revolution.

The all-stock deal announced Monday unites one of the Internet's marquee companies with one of its rapidly rising stars. It came just hours after YouTube unveiled three agreements with media companies in an apparent bid to escape the threat of copyright-infringement lawsuits.

Press Release:
[google.com...]

 

Hach3

5+ Year Member



 
Msg#: 3114679 posted 9:15 pm on Oct 9, 2006 (gmt 0)

Not a bad ROI for YouTube.

Can Google make up that money though, that remains to be seen.

ericfwebmaster

10+ Year Member



 
Msg#: 3114679 posted 9:20 pm on Oct 9, 2006 (gmt 0)

Doesnt it seem like as soon as they start to try and make money through forced preview ads that people will just jumpship to the next "YouTube".

vite_rts

5+ Year Member



 
Msg#: 3114679 posted 9:22 pm on Oct 9, 2006 (gmt 0)

who thinks this is a bad idea?

who thinks this is a good idea?

What about youtube is worth 1.5 billion?

why is google video worth so much less?

I guess when you've got control of that much cash, the rest of us cannot understand :-)

[edited by: vite_rts at 9:27 pm (utc) on Oct. 9, 2006]

skibum

WebmasterWorld Administrator skibum us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 3114679 posted 9:26 pm on Oct 9, 2006 (gmt 0)

It's all about the eyeballs and that is pocket change to GOOG.

vite_rts

5+ Year Member



 
Msg#: 3114679 posted 9:28 pm on Oct 9, 2006 (gmt 0)

1.5 billion in cash?

Perhaps its an all shares swap

In that case, perhaps one should remember other such buys

[edited by: vite_rts at 9:31 pm (utc) on Oct. 9, 2006]

kaz

10+ Year Member



 
Msg#: 3114679 posted 9:29 pm on Oct 9, 2006 (gmt 0)

bad idea

skibum

WebmasterWorld Administrator skibum us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 3114679 posted 9:31 pm on Oct 9, 2006 (gmt 0)

No, all stock but 1.6B to GOOG either way doesn't seem like much to Google.

Clark

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 3114679 posted 9:31 pm on Oct 9, 2006 (gmt 0)

Because google video is where they want to be and they are happy with their technology but not the eyeballs to their video site. They have big media plans (as does yahoo).

Pretend that they just spent 1.7 billion in marketing google video except that they are almost guaranteed to keep the large number of boobtube visitors unless they screw something up.

BTW, to compare to a similar acquisition of eyeballs and predict if it was a good or bad move, does anyone know, has blogger.com lost any viewership since acquired or has google's "addons" improved viewership? Further, did they make money on the purchase due to adsense or lose money?

vite_rts

5+ Year Member



 
Msg#: 3114679 posted 9:35 pm on Oct 9, 2006 (gmt 0)

stock/shares same thing,

That 1.6 billion valuation then means,,,, very little if the acquisition doesn't build value equal to whathe present valuation is

Is google really worth more than ,,,, say P&O , the cruise company, well according to stock price,,,,,

But time will tell,

I hope some one will pay me that kinda cash for my websites , soon :-) :-)

trillianjedi

WebmasterWorld Senior Member trillianjedi us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 3114679 posted 9:35 pm on Oct 9, 2006 (gmt 0)

who thinks this is a good idea?

It's a no-brainer.

Google will make a ton of money out of it over the years - the ad potential there is just mind-boggling.

TJ

Wibfision

5+ Year Member



 
Msg#: 3114679 posted 9:38 pm on Oct 9, 2006 (gmt 0)

What is to stop somebody else setting up another one? $1.65 billion is a huge incentive.

Brett_Tabke

WebmasterWorld Administrator brett_tabke us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 3114679 posted 9:39 pm on Oct 9, 2006 (gmt 0)

> who thinks this is a good idea?

I do I do.

> What about youtube is worth 1.5 billion?

Umm, ok - I give!? Could it be the 60-100 million page views a day?

> why is google video worth so much less?

Because no one knows it is there and their algo for putting related stuff in your face - well - it sucks.

Hmmm... I wonder what our old buddy Marc Cuban has to say about this today..hehe - go mavs!

gibbergibber

10+ Year Member



 
Msg#: 3114679 posted 9:48 pm on Oct 9, 2006 (gmt 0)

--Not a bad ROI for YouTube.--

Only because they got taken over, not because they had a profitable business model. You can't build a sustainable business with that kind of plan.

There's been high profile billion dollar takeover after another, usually with one established dotcom buying a new unprofitable one, and they usually fail to justify themselves even years down the line.

--Umm, ok - I give!? Could it be the 60-100 million page views a day?--

But the expense of delivering the video, not to say the potential lawsuits and/or profit-sharing involving copyright owners, outweighs the possible revenue from pageviews.

[edited by: gibbergibber at 9:50 pm (utc) on Oct. 9, 2006]

Quadrille

WebmasterWorld Senior Member quadrille us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 3114679 posted 9:48 pm on Oct 9, 2006 (gmt 0)

Even if they don't make as much as they hoped - Y! and M$N won't make a penny on it!

It has to be a good deal, unless the punters all jump ship tomorrow, and they won't; the lionger Google can keep ahead of new sites in this field, the more cash they'll make.

And the prospects of much more free video - legal free video - makes this a good deal for us too.

It's clear from the parellel deals with cbs, universal, warner et al., that the business model is advertising and free downloads. Would M$N have dared to apply that model? Not a hope!

vite_rts

5+ Year Member



 
Msg#: 3114679 posted 9:58 pm on Oct 9, 2006 (gmt 0)

Its interesting how much people spend trying to bring the internet an the movies together, does anyone remember any precedents?

Google, the company, will either make a lot off cash or

alternatively, it, google the company , will lose not much cash if things go the other way,

But hey you ask, what about the 1.6 billion dollars

i just had an interesting thought, I just realised that the people who use youtube probably don't already use Google, what a thought, they use youtube as their search engine,or perhaps yahoo/msn/ask

So google paid 1.6billion for new users, who currently don't use google

This is great actually, high drama, big players , big dollars

An, great motivation to all off us to go make something as original as ,,, youtube

Agggh, i'm green with envy, anyone got some original idea's to give away :-)

Quadrille

WebmasterWorld Senior Member quadrille us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 3114679 posted 10:08 pm on Oct 9, 2006 (gmt 0)

A good point. Just inserting a Google site / web search will probably be worth 10% of the purchase price over a couple of years.

engine

WebmasterWorld Administrator engine us a WebmasterWorld Top Contributor of All Time 10+ Year Member Top Contributors Of The Month Best Post Of The Month



 
Msg#: 3114679 posted 10:09 pm on Oct 9, 2006 (gmt 0)

Oh, this is good money, although a little high.

Just look at the potential for ads with every video.

In addition, consider the AdSense potential and incentive for those uploading videos.

vite_rts

5+ Year Member



 
Msg#: 3114679 posted 10:16 pm on Oct 9, 2006 (gmt 0)

Erm, ,, I think I did not quite put the bit about youtube users not already using google quite correctly,

Put it another way, when msn messenger joined connections with yahoo messenger, did their combined use base qual their individual user bases added directly,

msn 30mill + yahoo35mill = combined 65mill ?

I just invented those figures above!

incrediBILL

WebmasterWorld Administrator incredibill us a WebmasterWorld Top Contributor of All Time 5+ Year Member Top Contributors Of The Month



 
Msg#: 3114679 posted 10:19 pm on Oct 9, 2006 (gmt 0)

> who thinks this is a good idea?

I do I do.

I do for the traffic, it's a huge win in that dept.

I don't as a stockholder unless the copyright issues of YouTube can be quickly addressed as the infringement lawsuits are starting to stack up.

I don't for the price paid, it's crazy DOT COM BUBBLE pricing all over again and so far Google has been a very stable investment but this leaves me thinking their stock has just become highly volatile, escpecially if they can't squeeze money out of YouTube.

What's the YouTube game plan, slap AdSense all over the place?

[edited by: incrediBILL at 10:19 pm (utc) on Oct. 9, 2006]

maccas

10+ Year Member



 
Msg#: 3114679 posted 10:26 pm on Oct 9, 2006 (gmt 0)

I personally think YouTube will go down hill from here. As we know a large percentage of the material is either blatent copywrite infringment or borderline at best. Google will know doubt be more proactive in removing the offending material (aka Google Videos) and hence the users will find an alternative. I use youtube to watch shows that I am unable to get where I am i.e The Daily Show, once they are removed thats me gone.

Brett_Tabke

WebmasterWorld Administrator brett_tabke us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 3114679 posted 10:28 pm on Oct 9, 2006 (gmt 0)

Sooooo, what was all tha video noise a month ago from Mr Cutts about?

Things that make you go....hmmm

ashear

10+ Year Member



 
Msg#: 3114679 posted 10:28 pm on Oct 9, 2006 (gmt 0)

I just heard it was 100% stock, wow what a bad deal. Google made out here!

Brett_Tabke

WebmasterWorld Administrator brett_tabke us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 3114679 posted 10:31 pm on Oct 9, 2006 (gmt 0)

> I just heard it was 100% stock

And G stock jumped what - $500m since the rumors started floating last week.

So, that brings the purchase price down to $1.1b so far. How far will it go down tomorrow? By the time GOOG settles on the markets - G won't take a dollar out of their pocket and the stock is already accouting for itself in the marketplace.

incrediBILL

WebmasterWorld Administrator incredibill us a WebmasterWorld Top Contributor of All Time 5+ Year Member Top Contributors Of The Month



 
Msg#: 3114679 posted 10:48 pm on Oct 9, 2006 (gmt 0)

All I know if the last time things like this happened the market blew up in our faces and many people lost boatloads of money.

Just because YouTube is popular doesn't make it profitable. Lot's of popular and cool sites vaporized a few years back because they gave everything away and tried to make it up on volume, hope this isn't one of those things.

Only one thing we can do is sit back and wait to see how this plays out in the months to come.

[edited by: incrediBILL at 10:49 pm (utc) on Oct. 9, 2006]

jtara

WebmasterWorld Senior Member jtara us a WebmasterWorld Top Contributor of All Time 5+ Year Member



 
Msg#: 3114679 posted 10:54 pm on Oct 9, 2006 (gmt 0)

Congratulations to Google on their second successful product!

Now, they just have to figure out a way to make it profitable.

ALbino

10+ Year Member



 
Msg#: 3114679 posted 11:01 pm on Oct 9, 2006 (gmt 0)

If their 60 million pageviews are worth $1.5 billion then surely my 4 million pageviews are worth $100 million? :)

ATTN Google: Please buy my site.

BillyS

WebmasterWorld Senior Member billys us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 3114679 posted 11:13 pm on Oct 9, 2006 (gmt 0)

>>Just look at the potential for ads with every video

How fast do you think the loyal YouTube folks will head elsewhere when that happens? You're already changing its appeal.

>> I just heard it was 100% stock
And G stock jumped what - $500m since the rumors started floating last week.

So, that brings the purchase price down to $1.1b so far. How far will it go down tomorrow? By the time GOOG settles on the markets - G won't take a dollar out of their pocket.

I don't think it works that way. If they issue stock to purchase YouTube, then they dilute earnings and shareholders should be ticked-off.

If they purchase shares on the open market, they still have to pay market price - which is $1.6 billion. The only difference is they purchase fewer shares.

moTi

WebmasterWorld Senior Member 5+ Year Member



 
Msg#: 3114679 posted 11:16 pm on Oct 9, 2006 (gmt 0)

hmm.. this story reminds me so much of the napster/bertelsmann deal. welcome to web bubble 2.0!

napster story in short:

- founded as a revolutionary p2p file sharing tool in 1998 by shawn fanning

- fastest growing internet community at that time. peak time in 2001 with 38 million users

- purchased by bertelsmann for 80 million dollar. premise was to transform it to a legal download platform

- other platforms like kazaa and edonkey gaining user favor and taking up leadership in file sharing

- napster sued to death by record companies because of former copyright violations. finally got busted and turned-off

- brand name bought up by a software company. by now one among a crowd of moderately successful music download platforms

gregbo

WebmasterWorld Senior Member 5+ Year Member



 
Msg#: 3114679 posted 11:42 pm on Oct 9, 2006 (gmt 0)

i just had an interesting thought, I just realised that the people who use youtube probably don't already use Google, what a thought, they use youtube as their search engine,or perhaps yahoo/msn/ask

I don't think this is necessarily true. YouTube is a young company. G was around long before it. Why would someone using G switch engines just because they started using YouTube? Searching ("googling") is a habit developed over time.

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