AfterDawn: News

Google in talks for $1.6bn YouTube takeover

Google Inc. is currently negotiating the possible acquisition of popular video sharing site YouTube.com for roughly $1.6 billion, according to an insider, who also added that talks are at a sensitive stage, and proceedings could well fall through.

According to company stats, videos are viewed on the site over 100 million times a day, with 65,000 new videos being added by users each day.



Purchasing Youtube would give Google the potential become the lead player in the online video sharing market. According to research company Hitwise, YouTube commanded 46% of visits to U.S. online video sites in August, way ahead of MySpace's social-networking site, which took a 23% share, with Google Video taking 10%.

Analysts believe that a move would make sense for both parties.

"It's damn cheap for a company that already has a global presence," said Trip Chowdhry, an analyst for Global Equities Research. "YouTube's brand identity is no less than Google's and is no less than Coke's.

One significant issue YouTube has had is that a large portion of videos viewable on the site contain copyrighted material, which has already caused friction with Universal Music Group. Although the site does co-operate with demands by copyright holders, analysts believe the company is still in a precarious legal position.

But analyst Josh Bernoff of Forrester Research believes that Google, being the large software innovator that it is, may be able to implement automated systems to filter out copyrighted works. He also reckons that Google's presence gives the company much more leverage than YouTube to negotiate deals with copyright holders.

No YouTube representitives could be reached for comment, and a Google spokesman refused to confirm nor deny the reports, stating, "We don't comment on rumors and speculation."

Source:
WSJ

Written by: Ben Reid @ 6 Oct 2006 13:57

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• 22 comments

• sukhvail

  i wonder what's going to happen to google video. this is great news in my opinion, potentially strengthening google and moving them towards creating an operating system

  6.10.2006 15:24 #1

• tocool4u

  damn 1.6 billion....Well google has turned into one of the most popular if not most popular site in the world.
  
  Anyways I like google and hope they get bigger and bigger and bigger.

  6.10.2006 17:26 #2

• dude845

  if youtube dosn't sell right now they can sell later (maybe next year) for a even higher price.

  6.10.2006 19:27 #3

• newari

  YouTube isn't going get any more valuable if it gets run down....

  6.10.2006 20:40 #4

• ZippyG

  YouTube got big in 3rd world countries just like most of these new "fad" sites that are emerging. It doesn't generate anywhere close to billions in revenue, it has high operating costs and a limited shelf life. Is their brand and presense worth 1.6 bil? Hell no! You invest to make money, and the people coming up with these inflated, speculative valuations are possibly among the biggest morons around.
  
  YouTube COULD make money if they started cramming ads down its user's throats, perhaps sneaking ads in before displaying videos...but that would change the core at which YouTube is, and what makes it so popular.
  
  Google should stick to what they DID best - search. All their little side projects are cute, but if you haven't noticed the SRPs on Google are getting lower in quality as time goes by. Not to mention their Adwords program (primary source of revenue) being frought with spammy ads as well as rampant click fraud. Seems like 1999-2000 has escaped the memories of many. Hey, Maybe AfterDawn should sell out to the MPAA for 5 billion, then the can start filling the site with anti-dvd copying propaganda. ;)

  7.10.2006 00:05 #5

• ZippyDSM

  Google has become a corporation..sad
  
  I dont see how Google taking YT would protect it from the horror of the mafiaa that said YT can really only go down from here unless they start puting 10-20sec ads before videos and having abunch of ads on the page....any way you look at it You tube as it is now is dieing,there are plenty of free video sites now to many for the Mafiaa to kill...

  7.10.2006 04:16 #6

• rav009

  Sukhvail, Google creating a OS, where did you hear about that???
  
  ~LoL~ @ the Google YouTube takeover, next..Google takes over the world for roughly $8282.7bn :-p
  
  ......It'll happen one day, watch !!

  7.10.2006 04:37 #7

• Ripper

  Word!

  7.10.2006 04:44 #8

• ZippyDSM

  rav009
  couldnt they team with lunix and make a uber lunix package and sell it for 50-100,it wuld have wine and everything preinstalled to paly moives,music,DX games and surf the net with Firefox and such :3

  7.10.2006 04:52 #9

• gogochar

  Bring on the Google!

  7.10.2006 06:57 #10

• heeflung

  If this proposed merger is bad for the public, President Bush will be blamed for the consequences.

  7.10.2006 09:13 #11

• AlBundy

  I for one hope they don't sell. Why? Thre little letters DRM

  7.10.2006 12:34 #12

• neurokasm

  http://www.youtube.com/watch?v=GNLDLyeepVs

  7.10.2006 12:51 #13

• gamegirl3

  this is crap why would google want you tube?

  7.10.2006 13:04 #14

• ZippyG

  Google want's Youtube because they want to be a "player" in the online video sharing market. If they were to buy Youtube, it would move them closer to that goal. It will probably be like an addition to "google video", which is not quite as good in my opinion.

  7.10.2006 13:11 #15

• Mik3h

  EDIT.
  

  http://my.afterdawn.com/mik3h/blog_entry.cfm/351/myafterdawnguides - Guides written by me.
  http://www.adbuddies.org/java/ - Join Us Live On IRC!
  
  Xbox Live Gamertag - Mik3h

  8.10.2006 05:23 #16

• Irish13

  If I owned youtube I'd sell in a second. Thats alot of money and doesn't seem to make sense for google. To me the best part of youtube is searching for things when I'm bored that you can't find anywhere else. Example: I just typed in "Jim Carrey" and found great 5-10 minute segments from Letterman and skits from SNL and In living Color to remind me how awesome this guy is. My question is why is it such a bad thing to have free access to these types of things. Don't the anti-piracy groups realise that by letting you sample anything you want, there is a better chance your going to go out and buy something, besides, any of these type of clips I could have recorded myself at one time or another. Didn't I pay for the cable to enter my house originally for the right to tape these things back then to a VCR?

  8.10.2006 10:04 #17

• c4iscool

  IF google buys youtube somethings have to change. As of now youtube isn't profitable. I think if google buys youtube, they are going to change it into a videostore like guba w/ maybe more features. If google intends on keeping youtube the way it is.....I would have to say we are in a bubble. I do think it could be a smart thing to buy youtube, but not for 1.6 billion!

  9.10.2006 05:33 #18

• ZippyDSM

  c4iscool
  Makeing profitable deals with the Mafaa,Addign clips befor a vid is played,doubling or trippling the current moderation setup add a word filter to remove or suspend some vids becuse of CP/IP reasons there are some things they can do to it to make it make money without killing it but.....in the end theres no telling what most people will put up with.

  9.10.2006 09:38 #19

• gogochar

  It's official: Youtube is now Google's bitch.

  9.10.2006 12:21 #20

• thnva

  It's Official: Google Buys YouTube
  As rumored last week, search engine giant buys popular video site.
  Nancy Weil, IDG News Service
  Monday, October 09, 2006 02:00 PM PDT
  I know its its late, but here's a little more info:
  
  The companies will merge Google's search expertise with YouTube's video expertise, pushing what executives believe is a hot emerging market of video offered over the Internet. Google Video will continue to operate, executives said, calling that service "a very valuable aspect of the Google experience." The aim is that it will improve as a result of the acquisition, Google executives said.
  
  The number of Google shares to be issued will be based on the 30-day average closing price two trading days before the deal is completed, Google said.
  
  

  9.10.2006 15:51 #21

• xhardc0re

  yup, it's official. YouTube is now GooTube. Errr wth they decide to call it. Expect a really whacky name, because Google is just whack.
  
  I have a channel on YT with about 500 videos. I expect major Hell to be headed my way & every one of my friends with licensed anime. But we already have a battle plan against them. Unless they are willing to manually search tens of thousands of videos, I think our idea will work. As a matter of fact, our strategy is so sure to work I'm already laughing.
  
  YouTube has about 70 employees. If you split that $1.65 billion that's $23.5 million a piece. NOT BAD!!

  9.10.2006 21:40 #22