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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

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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".

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 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.

By lwright84 on 10/9/2006 5:30:32 PM , Rating: 2


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

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
Google celebrates many holidays by changing their logo.

Yet, here are some holidays Google has NEVER celebrated:

Memorial Day
Veterans' Day

Keep in mind, is their US site, they have google.??? for other countries. So they are not avoiding these holidays because they are American holidays.

In fact, recognizes "Remembrance Day" in Canada:

Do you trust Google? Have you bought in to all their propaganda that they're so much better than other companies? That they're any different?

Google even admits it's doing evil things around the world.,,13132...

I'm glad for Google's innovation, but let's face it, they're a bit lacking in the values department. And that's important, too.

RE: Google Hates America
By kruege311 on 10/11/2006 4:31:03 AM , Rating: 2
Well, now there's an educated statement if I've ever heard one. Just because google didn't create any fancy logo for those holidays you label them as hating America? Tell me, while you were looking through the link you provided, were you blind to the logo they used for Independence Day? That holiday alone I would call one of the most patriotic and American loving holidays we have.

So, um, since you're so good at figuring out why google hates American, maybe you can explain to us as to why google would choose to celebrate America with their fourth of July logo?

I'm actually even more surprised that your post got a rating of 4. Do that many people really take such a blind approach to labeling peope/companies? Talk about some sorry times we live in.

By the way I don't claim to have any direct knowledge about google's motivation for anything, but I certainly am not going to start bad mouthing their viewpoint towards America with an argument as shallow as "they didn't create logos for such and such holidays".

RE: Google Hates America
By kruege311 on 10/11/2006 4:37:02 AM , Rating: 2
Doh! The phrasing should read "why google hates America" not "why google hates American". Sorry about that.

Update Tuesday
By crystal clear on 10/9/2006 8:49:48 PM , Rating: 3
"Earlier on Monday, Universal Music Group and Sony BMG said they had signed distribution deals with YouTube, following a similar agreement with Warner Music Group last month. Google also said on Monday that it has signed similar deals with Warner and Sony BMG."

Source Reuters.

This is not a all cash transaction rather all stock transaction for taxation purposes.

On the other hand MS signed up Blinkx a video search company
for its Soapbox.

By shantiwuvstevin on 10/9/2006 6:07:04 PM , Rating: 2
Wow, it seems like every time you turn the corner Google is buying someone elses idea because they have a lot of money and market influence. It reminds me of the late 90's and Microsoft when they would do the same thing and they got slapped with monopoly trials galore. There's no way Yahoo and MSN are going to be able to match and follow these moves in the near future and if Google keeps buying all the good ideas it won't be long before they're a monopoly. I know it a bit premature (and don't get me wrong, Google is my homepage), but isn't anyone else concerned? Just a thought.

By mandeep on 10/9/2006 6:45:54 PM , Rating: 2
time to start dling those videos i liked to my harddrive

Sad Day Indeed
By Cooler on 10/9/2006 8:48:46 PM , Rating: 2
I will miss the old YouTube I knew it was too good to last. I just hope it ends up better then google video.

By zam786 on 10/10/06, Rating: -1
"Intel is investing heavily (think gazillions of dollars and bazillions of engineering man hours) in resources to create an Intel host controllers spec in order to speed time to market of the USB 3.0 technology." -- Intel blogger Nick Knupffer
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