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Google to buy YouTube for $1.65 bil USD in stock

DailyTech reported last week the Google was in talks to buy online video site YouTube. The site currently holds nearly 50% of the online video search market and serves as many as 100 million videos per day.

Today, Google confirmed all of the rumors and announced that it has agreed to snap up YouTube Inc. for 1.65 billion dollars in stock. With the purchase, however, comes YouTube's baggage which consists of issues with copyright infringement and numerous lawsuits. The company is currently embroiled in a rather nasty fight with Universal Music.

Investors, on the other hand, for the most part have been enamored with the idea of a Google-YouTube merger. USA Today reports:

The deal would be by far Google's most expensive in its eight-year history. The lofty price underscores how important Google expects online video to become as more viewers and advertisers migrate from television to the Internet.

"This fits with Google's strategy," said Roger Aguinaldo, an investment banker who also publishes a dealmaking newsletter called the M&A Advisor, told the AP. "It's something that they couldn't build fast enough by themselves."

With this big merger now taken care of, who could be next on the takeover list? Investors are pointing fingers at a possible Yahoo acquisition of Facebook.com.

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why?
By cnimativ on 10/9/2006 5:30:42 PM , Rating: 2
why get youtube when it has google video :o




RE: why?
By TomZ on 10/9/2006 5:32:32 PM , Rating: 2
marketshare and mindshare.


RE: why?
By cnimativ on 10/9/2006 8:36:32 PM , Rating: 2
Kinda useless IMO. Buying something that it already has just for the "market/mind share". Youtube brand should not worth 1.6 billion.

1999 Internet bubble, Web 2.0 edition


RE: why?
By Trugentleman02 on 10/9/2006 5:37:27 PM , Rating: 2
because google video sucks, so buy something that the majority of the people already like.


RE: why?
By Aikouka on 10/9/2006 7:01:45 PM , Rating: 3
Personally I think YouTube went to the dumps when it changed to version 2 or whatever they call it. I noticed a huge drop in overall video quality, especially if you download the videos and full screen them. Before, it was easily bearable, but in version 2, it reminds me of the old 2mb real media video days *shudder*.

I've always liked Google Video a bit more, especially since downloading videos is so much easier.. and if you want an AVI, just change your user agent to a linux OS. Also, the quality of Google Video videos is much better. I also prefer the more streamlined interface. It's like the difference between Facebook and MySpace.

To kind of be more on-topic, I think this is essentially a huge waste of money on Google's part. The real reason YouTube is more popular is because of all the illegal content available on it. You try to find that certain music video but it's not on Google video... so you go to YouTube to get it. Eventually you just phase out the site that doesn't have what you want and keep going to YouTube.


RE: why?
By Josh7289 on 10/9/2006 7:22:23 PM , Rating: 2
With Google behind YouTube I expect illegal content on YouTube to drop dramatically, just like there is almost none of it on Google Video. Then maybe some other company will pop up...


RE: why?
By Vertigo101 on 10/10/2006 12:02:47 AM , Rating: 2
I've seen several complete movies on Google Video, including "Spirited Away".

http://video.google.com/videoplay?docid=-260886461...


RE: why?
By JNo on 10/11/2006 3:54:44 AM , Rating: 2
wow - that's such a good film, so beautifully and painstakingly illustrated, not to mention extremely touching, and you just completely ruined it by watching it in sh1tty google video format (in what looks like non-widescreen, non-Japanese (I know subtitles are challenge for some), stuttering framerate and rubbish resolution). Congratulations, you're the world's worst pirate.


You got Tubed
By Schadenfroh on 10/9/2006 4:52:34 PM , Rating: 4
Well, I guess Google and now pay for the legal fees from the RIAA and MPAA lawsuits that are sure to come because of YouTube.




RE: You got Tubed
By Brandon Hill (blog) on 10/9/2006 4:53:39 PM , Rating: 4
Expect the lawsuits to increase significantly with Google's deeper pockets :)


RE: You got Tubed
By jkresh on 10/9/2006 5:16:10 PM , Rating: 3
Actually I suspect the vast majority of copyrighted content will either be removed from youtube (assuming the deal goes through) or become licensed drm'd and have a charge. I would expect the new youtube to be very much like google video in terms of its content. This buyout is good in that it will be easier to search through youtube to find what you want, but it means anything not user generated is probably going to no longer be “free”.


RE: You got Tubed
By GhandiInstinct on 10/9/06, Rating: 0
RE: You got Tubed
By S3anister on 10/9/2006 9:53:48 PM , Rating: 1
"Goog Tube" LMfao.


RE: You got Tubed
By Xavian on 10/9/2006 6:10:01 PM , Rating: 1
i hope not, thats what makes YouTube. Stop that and you destroy what you paid some $1.65 billion for, google ads on YouTube i can take, but DRM'd user content? no thanks.


renamed?
By lwright84 on 10/9/2006 5:30:32 PM , Rating: 2
Goo-Tube?

*chuckle*




RE: renamed?
By Sunday Ironfoot on 10/9/2006 5:57:55 PM , Rating: 2
quote:
Goo-Tube?


Beat me to it :(


RE: renamed?
By walmartshopper on 10/9/2006 6:40:54 PM , Rating: 3
lol, Jay Leno beat both of you to it.


RE: renamed?
By S3anister on 10/9/2006 9:57:34 PM , Rating: 2
lol i win though, goog tube is better lol.


If you can't beat 'em...
By Engine of End on 10/9/2006 7:36:18 PM , Rating: 2
...Buy 'em. Typical capitalist attitude.




RE: If you can't beat 'em...
By Dactyl on 10/9/2006 7:58:49 PM , Rating: 2
Yes, it's called "The American Dream"

Starting an innovative company, being successful, and then selling it for an obscene amount of money to some bigger company.

It's a beautiful thing and that's why we have so much innovation in this country.


RE: If you can't beat 'em...
By JackTheLad on 10/9/2006 8:44:55 PM , Rating: 2
So Google pays $1.6 billion for a company that makes a loss, and that has no clear business plan to generate a profit.

This is all getting so reminiscent of 2000 and the internet bubble.


RE: If you can't beat 'em...
By Heron Kusanagi on 10/10/2006 4:28:59 AM , Rating: 2
Don't really think Google is such an idiot.

But I guess all Google needs to do now is to make a OS and they will be the new Microsoft.


Google Hates America
By Dactyl on 10/9/2006 7:55:13 PM , Rating: 4