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Is the acquisition a good move for YouTube?

Google today purchased YouTube Inc. for a reported $1.65 billion in a deal that will most likely help the company become a leader in the growing online video market. The deal is Google's most expensive acquisition that it has completed in its eight-year reign. Rumors of a potential buy out began circulating last week, and further reports claimed that a deal would be coming soon. YouTube will retain 67 employees, including the company's two co-founders – who are now both multi-millionaires.

Even though a number of readers and analysts think the merger is a good thing, it appears just as many are pessimistic about Google's decision to purchase YouTube.

Copyright infringement is a serious issue that Google will have to take a look at. Even though a lot of copyrighted material ends up being removed over time, it is still easy to discover a large number of copyrighted files being shared via YouTube. Universal Music is a prime example of a company accusing YouTube of costing the record company millions due to infringement. If Google can resolve some of the legal issues that it is acquiring along with YouTube, I believe the purchase will prove to be a good investment.

Remember Google Video? The service that has been a complete and utter failure compared to YouTube will not be eliminated any time soon. In fact, both Google and YouTube announced deals today with companies such a s Sony BMG Entertainment, CBS, Warner Music Group, and Universal Music group. The deal will allow users to watch music videos for free, while advertising revenue will head towards the proper parties.

Google has a number of ways that it wants to use YouTube to help push Google's online video campaign – including possibly creating a new video platform. The ideal situation would be for Google to provide its amazing advertising prowess alongside the vast popularity and creativity of YouTube's staff.

I am still very interested in hearing what you guys think about Google's acquisition of YouTube.



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Excellent Move
By jasd2d on 10/10/2006 8:35:22 PM , Rating: 2
I think this is an excellent move because of two reasons: 1) Google's advertising prowess and 2) Youtube.com's incredible popularity.

Google is probably working on a new, clever way to index and search video (maybe some sort of audio translator? or a way?) to generate keywords from the video that they can tie ads to. Adwords customers would be able to buy keywords that are found within the meta data of a video file and a text ad would display during the video, or pre/post like they do on Revver.com videos. Imagine if the imbedded player that you can pull of the youtube site also included a scrolling ad ticker that changed depending on the subject in real time! That is super cool. Add in the viral nature of youtube content (even people like me who know zero HTML can grab a video and plop it in my blog) and you've got an interesting extension of Adwords.

I really feel this is a move that was made more to leverage adwords than to build equity for Google Video.





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