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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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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.





“Then they pop up and say ‘Hello, surprise! Give us your money or we will shut you down!' Screw them. Seriously, screw them. You can quote me on that.” -- Newegg Chief Legal Officer Lee Cheng referencing patent trolls

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