Why YouTube Could Make Things Difficult For Google
from the keep-your-friends-close... dept
In all the hysteria over Google’s purchase of YouTube, one angle that’s gone largely unexplored are the implications of the buy for Google’s advertising business. The common thought is that YouTube now gives Google plenty more page views to sell ads, as well as a huge audience to show video ads, but it’s also possible that the YouTube buy could actually hurt Google’s advertising business by alienating external sites with which it has advertising deals. News Corp. is already reportedly seeking some sort of reassurances from Google over the potential conflicts of interest the YouTube buy could create, in light of its $900 million deal for Google to sell and serve ads on MySpace. As Google expands its media empire, this sort of problem will become more prevalent: companies may be happy to partner with Google because it can help them monetize its content, but are likely to grow uneasy when Google comes into a space and becomes a competitor, too. Perhaps this is one reason why Google’s not really done much to build up Orkut lately: it doesn’t want to alienate itself from more popular external social-networking sites that offer it a more immediate and lucrative return through ad deals. Google’s popularity and power already causes it problems with people who see it as somehow unfairly profiting from its work. The same type of conflicts from its advertising-partners-cum-competitors seems inevitable.