(Rumor) Google to buy YouTube for 1.6 Billion

W

WallstYouth

http://www.techcrunch.com/2006/10/06/completely-unsubstantiated-googleyoutube-rumor/

Rumored price is $1.6 billion. A quick phone call to a VC confirmed that the rumor is circulating (he also confirmed the price), but that is far from confirmation that this deal is happening.

I believe this is a smart move on Google's part.

1) Google buys Youtube
2) Youtube and Google deploy video adwords ie- contextual/”vidtextual” ads postroll, monetizing the content.
3) Google delivers Youtube via Apple’s iTV, to generate more revenue on their tv, what a novel concept.

Also, lets say it is 1.6 billion. with Youtube’s existing traffic and Google’s ability to increase it, you’re saying Google can’t return its investment within the first few years? Don’t look at the 1.6 billion for what Youtube is today, but what Youtube will be once injected into Google. We were all once calling news corp idiots for buying myspace a year ago, now it’s a steal.

Hats off to Google if they pull this off.
 
Hat's off? Not likely.

Consider these points:

1. YouTube hasn't found a way to monetize its site. Sure videoads might be interesting, but there's a reason why we switch from regular TV show to internet, cables, and TiVo.

2. Clustered server technology that Google has might be a good addition to solve YouTube's bandwith problem. But still, this won't be plausible for business. Why would you add burden to your network use for something that is yet to score profit.

So I think Google's stock might spike a while because of this but it's not there to stay
 
YouTube is #10 site on web.

Mainstream media is moving onto YouTube in a big way...
Check out NBC's YouTube channel:

http://www.youtube.com/profile?user=NBC

YouTube is now more powerful than NBC.

Most people making negative arguements about YouTube are 6 months out-of-date internet time...
Which is about 50 years in human terms.
 
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