YouTube Tries On The Skype Billion Dollar Buyout Plan For Size

from the hype-hype-hype dept

A year ago, we were amazed at how Skype's founders and investors more or less manipulated the press into claiming the company (which had made very little money) was worth $1 billion, then $3 billion just a short while later, only to end up at $4.1 billion only a couple months later. The numbers are hard to justify no matter how you look at it, but press hype (fed eagerly by the investors) worked like a charm until someone coughed up that huge amount. Earlier this year, it looked like Facebook was trying the same strategy -- except they started at $2 billion, despite the fact that their larger competitor, MySpace, was bought only a few months earlier for $580 million. It appears that $2 billion may have been a bit too high to start in this game. $1 billion works much better. So, almost exactly a year after Skype first pulled their $1 billion number out of a hat, here comes the press claiming that YouTube (with barely any revenue and huge bandwidth bills) is now worth $1 billion. How long will it be until we see that number jump higher and higher until someone drastically overpays? Perhaps instead of starting new businesses (that compete with YouTube), Skype's founders should just consult other hot startups on how to maximize the insanity right before selling out.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    I'm in..., Jul 24th, 2006 @ 4:30pm

    For the big #1. Or First Post for you losers!

     

    reply to this | link to this | view in thread ]

  2.  
    identicon
    Xcetron, Jul 24th, 2006 @ 4:41pm

    This is like a chance to make money like the gold rush.

     

    reply to this | link to this | view in thread ]

  3.  
    identicon
    Oh Yeah, Jul 24th, 2006 @ 4:58pm

    Before all you whiners roll in with your useless comments about the first post, I'm number 3!

    Get a life you wannabe geeks!

     

    reply to this | link to this | view in thread ]

  4.  
    identicon
    Swati, Jul 24th, 2006 @ 5:09pm

    It's like the bigger your bill, the more they are worth.

    I'm starting a site that gives a thousand dollars. Maybe that'll get me a few billion dollars.

     

    reply to this | link to this | view in thread ]

  5.  
    identicon
    Anonymous Coward, Jul 24th, 2006 @ 6:22pm

    Actually having recently spent some time trolling through youtube, a site called albinoblacksheep.com, and google videos I could easily see Google buying youtube and still find a way to make a profit off it.

     

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  6.  
    identicon
    John, Jul 24th, 2006 @ 6:25pm

    1/2 a billion would be too much

    That's just silly. I was just at their site last night and I stopped looking at the videos for a moment and wondered "how are they making money here?" I left thinking, well it's simple, they are not.

    Eye balls alone does not = revenue. They have huge bandwidth bills and even if it was filled with ads, they wouldn't get much for them as there would be so few clicks.

    Even Google doesn't want their AdWords ads on MySpace... neither does Yahoo want their ads. Way too many ads to serve up and simply too few clicks.

     

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  7.  
    identicon
    some geek, Jul 24th, 2006 @ 6:51pm

    As a network admin and small business owner, I *almost* feel bad every time i watch a video and send the link around. I can just feel the bandwith counters clicking away.

    However, I still watch and share since a) they knew what they are doing and b) for the moment, they still want me to do this (lord knows why exactly)

     

    reply to this | link to this | view in thread ]

  8.  
    identicon
    Fred, Jul 24th, 2006 @ 7:25pm

    Offering content with no direction

    These content providers do not have any direction. they host content for the massess, with little or no segmentation. They let users segment themselves by allowing them to chose what they want to see.

    Their contracts with web analytics providers like coremetrics and omniture are huge (those companies charge based on page views)... they employ people to look at these massive amounts of statistics and segmentations opportunities. Yet, they do nothing with it.

    MySpace, for example, with it's 58 million users, allows one to insert date of birth, location, schools attended, jobs, personal interests, gender, zipcode, general interests, books, movies, etc... they have SOOOOO much information on a person, yet, they still offer silly ads for personals, and for MySpace parties in Denver, Colorado (I'm in NY and my profile says "IN A RELATIONSHIP"..... you idiots!!!!!)

    So, their potential is great, indeed. But they do nothing with it. Potential is worth something, yes, but even after MySpace was bought out, nothing has happened...

     

    reply to this | link to this | view in thread ]

  9.  
    identicon
    Dan Zen, Jul 24th, 2006 @ 8:48pm

    One word... pro

    That's what Flickr did and I can see it working with video hosting even better. They just don't want to scare away people right now... getting us used to it...

    Dan Zen
    http://www.danzen.com
    http://www.zenvlog.com
    http://www.zenmix.com

     

    reply to this | link to this | view in thread ]

  10.  
    identicon
    Skibare, Jul 24th, 2006 @ 9:02pm

    the Way to Capitalize is going to be Seen on Level

    youTube.com is one of 225 present Video Downloading NEW companies and most ride on the Level3 Network===check the Transport Numbers and INCREASE quarter over quarter!
    skibare

     

    reply to this | link to this | view in thread ]

  11.  
    identicon
    Anonymous Coward, Jul 24th, 2006 @ 11:12pm

    Re: One word... pro

    I agree this might be the way to go. A lot of software companies offer a free version (say Zonealarm for example) and then later offer a "pro" version with more content. Once the user base is large enough and the content sufficient to meet the demand, there will certainly be people willing to pay for premium content (say if Kevin Smith wanted to offer a sneak peek of Clerks II for example). I've seen videos that have gotten hundreds of thousands or even millions of views that I'm sure people would be willing to pay a small monthly fee to be able to access (although given how the music and entertainment industry work they'd find a model that assures nobody would participate if left in their hands).

     

    reply to this | link to this | view in thread ]

  12.  
    identicon
    Faceless, Jul 25th, 2006 @ 11:55am

    Owners?

    To re: One word..pro,

    Kevin Smith does not have the rights to distribute his films in such a manner, MGM does as it paid for that exclusive right. Furthermore, cinema owners would not pick up a film that had a "sneak preview" on the web as it underminds their ability to screen the film on the big screen.

    It's amazing that people who are supposedly are Digital Media mavens, don't realize how content production and distribution works in the real world. There's a very entrenched production/distribution/exhibition chain that will take a long time to fully disrupt. It's not going to happen in 6 months over YouTube.

    Don't believe the hype.

     

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  13.  
    identicon
    jiyocricket, Jul 25th, 2006 @ 12:18pm

    sharing revenue

    I think if youtube provides a fraction of their $$ to the uploaders, they will be unsurmountable Jiyocricket videos has been raking in audiences just by linking to youtub feeds

     

    reply to this | link to this | view in thread ]

  14.  
    identicon
    E Z man, Jul 25th, 2006 @ 7:19pm

    broadcast.com

    Mark Cuban made a bundle off that stinker worthlesss site too.

    I bet members of the press have some invested options.

     

    reply to this | link to this | view in thread ]

  15.  
    identicon
    sean, Jul 28th, 2006 @ 8:13am

    Re: 1/2 a billion would be too much

    Agreed. As one that one that manages Interactive Marketing with Internet as one of many channels it leaves you wondering. On the other hand you can see how companies are saving money sending links off their own site to pull from videos on youtube.com saving the company that should pay bandwidth alot of cash.

     

    reply to this | link to this | view in thread ]

  16.  
    identicon
    sean, Jul 28th, 2006 @ 10:08am

    Re: 1/2 a billion would be too much

    Agreed. As one that one that manages Interactive Marketing with Internet as one of many channels it leaves you wondering. On the other hand you can see how companies are saving money sending links off their own site to pull from videos on youtube.com saving the company that should pay bandwidth alot of cash.

     

    reply to this | link to this | view in thread ]

  17.  
    identicon
    Byron Kiing, Oct 7th, 2007 @ 6:28pm

    Re: to save you all

    simply put apease me, give me or displease me

     

    reply to this | link to this | view in thread ]

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    identicon
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    reply to this | link to this | view in thread ]

  19.  
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    iro zeny, Jun 22nd, 2009 @ 12:37am

    iro zeny

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