Grouper Buy Sends YouTube Billion-Dollar Buyout Plan Into Overdrive

from the fishing-for-dollars dept

YouTube has already been through one round of the Skype Billion-Dollar Plan, which didn't quite work as the company's CEO talked its takeout price down to $600 million. But it's been resurrected for a second go-round, after Sony yesterday it announced it was buying online video site Grouper for $65 million. Grouper didn't have too many users -- less than 1% market share, according to some figures -- which means YouTube must be worth $1 billion. Wait, make that $2 billion. Some people say this isn't accurate because of the copyright problems a media-company buyout of YouTube could likely bring, but that's a small nit to pick when there's the more fundamental issue that you're talking about billions of dollars for a site that's only just started its attempts to monetize its traffic. But basing a YouTube valuation on the Grouper deal is way off-base: Grouper wasn't bought for its miniscule traffic, but for its technology (as TechCrunch points out after dropping that $2 billion number), which Sony could ostensibly use to distribute content online. While YouTube's attracted a lot of traffic, and offers a cool service, its technology isn't particularly noteworthy, as is evident from the spate of copycats it's spawned. Basing a YouTube valuation on the sale of a fairly fundamentally different company isn't accurate; but somehow it's hard to believe that will matter when YouTube goes to cash that seemingly inevitable big check.