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It is unknown if and when the deal between Google and YouTube will be made

The Wall Street Journal has published a report that claims Google is in negotiations to buy YouTube for an undisclosed amount – some speculation has the price tag on the site at more than $1.6 billion. A source familiar with the talks also said that the current negotiations are at a “sensitive” stage and could be halted or setback at any given moment.

While better technology allows larger frames, higher frame rates and better resolutions, the acquisition would make sense from a Google standpoint. YouTube's audience mixed with Google's ability to market ads could put Google in a nice position in the emerging market for video advertising. As of September 30, YouTube has almost half of the online video search market – serving more than 100 million videos per day.

The deal would, however, have some downsides for Google. The first problem the company would have to deal with is that YouTube has been facing pressure to clean up blatant copyright infringement by its users. Universal Music, for example, has claimed that YouTube owes the company “millions” because of infringement.

A number of companies have been trying to woo the YouTube co-founders into selling the company. Viacom, which offered $750 million for Facebook last year, may have also offered to purchase YouTube. Micorosft, Yahoo and the News Corporation have also shown previous interest in YouTube.

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RE: Why toss away 1.6 billion???
By JeffDM on 10/8/2006 4:04:04 PM , Rating: 2
Hell didn't Microsoft just announce their own video service site a few days ago? YouTube?? ZZzzzz...

Has any Microsoft web service proved to be popular? Usually Microsoft's web services have users because the people they have don't bother to go to any other site, IE points to the MSN services by default, but even exploiting lazyness wasn't enough to beat Google, MySpace, etc.

YouTube is a major name now, it has an huge existing user base and collection of videos, infrastructure and programmers. Anyone buying YouTube is getting all those in one package rather than having to build all of that up the slow way and risk not being successful. The user base is the hardest one to build, though attracting the talent is a little harder. Google is pretty popular among young programmers so that might not be a selling point.

The biggest problem is being able to monetize the site, I don't think what they have now is paying sufficiently.

"So, I think the same thing of the music industry. They can't say that they're losing money, you know what I'm saying. They just probably don't have the same surplus that they had." -- Wu-Tang Clan founder RZA

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