Who Needs The Truth When We Can All Just Point At Each Other?

from the well-they-said-it dept

The big story across the web today is that Google is in talks to buy YouTube for $1.6 billion. Of course, there's been no real confirmation that the talks are actually occuring, or that Google's even interested in buying YouTube, but why should that matter? This story has unfolded in a rather curious way. It began with a reasonable post on the Techcrunch blog, titled "Completely Unsubstantiated Google/YouTube Rumor" -- which is fair enough, since it was pretty clear that this was nothing more than an unconfirmed rumor, and the author said he thought it was "40% likely to be at least partially true." There's no real problem, until that post turns into "Google Is in Talks to Buy YouTube" in the Wall Street Journal, with the only sources cited as the ever-present "person familiar with the matter" and the original blog post. But, if it's in the WSJ, it must be true, right? It's good enough for plenty of other big-name outlets to report the story as fact. Then, to complete the circle-jerk of manufactured legitimacy, a different writer on Techcrunch than the original poster says the rumor must be more than 40% true, since, after all, the WSJ reported it. Color us -- and other observers -- skeptical. The "person familiar with the matter" -- who could be anybody that read the original blog post -- the WSJ cited is probably the same person that told the same reporter last month that Yahoo was ready to drop $1 billion on Facebook, a deal we're still waiting on. All this ridiculousness is just the latest step in YouTube's implementation of the Skype billion-dollar buyout plan, which they've used before to drive their price into the billions of dollars and deflect attention away from the question of just how they plan to turn traffic into profits. So just getting one of your VCs to make up an inflated sale price is so old hat; now the plan calls for getting well-read blogs to publish unsubstantiated rumors (even if they're labeled as such), then let the mainstream financial press give the story legitimacy by association, and voila -- your company's now worth another billion. Not a bad morning's work, really, and much easier than actually developing a real business model. For all we know, it's all true. Google could be buying YouTube -- after all, when you use $400 shares of stock for toilet paper, what's $1.6 billion? But the evidence still seems a bit flimsy and we'd rather the discussion about the acquisition happen, you know, after the acquisition.
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  1. identicon
    Fox McCloud, 7 Oct 2006 @ 4:09am

    What if...

    Let's assume for a moment that this isn't a conspiracy by YouTube. Let's assume that the blog poster simply wanted to know weather Google (or anyone else) was interested in buying Google. What better way to determine if it's true than to spread a rumor that it's true, and then see if either one denies it?

    Think about it. If I was to tell you (to use everyone else's example) that McDonald's was going to buy out Burger King for $400 million, and then the WSJ or whoever ran the story and it got a lot of play on CNBC, one of three things would happen:

    1) McDonalds would deny it
    2) Burger king would deny it
    3) We'd have a deal signed towards the end of the day

    That's how it is. If a person spreads such a rumor and actually gets a lot of media attention, then usually the subject of the rumor will either confirm or deny it. What suprises me is that neither Google or YouTube has denied this, which seems to suggest they might actually be in talks. Usually if a company doesn't come out and deny a rumor (or file a "shut up" lawsuit like apple does) it means the rumor is true.

    Think of it like me making a rumor that brad pitt was hooking back up with jennifer anniston. Either anniston's PR person or brad's PR person would have released a response by the end of the day, but at the end of the day I'd know (with some deal of certainty) that they were still broken up. In effect, spreading a rumor that you don't believe is true anyway is a good way to be sure it's not.

    In the print media this doesn't work. If I'm a reporter at the new york times and I report that I think bran and anniston are getting back together, and have no proof at all, I'd be cleaning out my desk by 3 that afternoon. However, for bloggers, this tactic works fine because they have no accountability. So what if it's a total lie? Worst case scenario Google might shut down his blog. It's not like it'll cost the blogger his job, whereas for other media it usually does.

    Now, a more likely scenario is if this man at the WSJ simply wanted to squeeze an answer out of Google/YouTube. He could pay a blogger to post the rumor (which he then in turn cites) and see if google/youtube denies it. Worst case, he had a bad source. Best case, he's got a huge scoop. Either way, he doesn't lose too badly.

    For that matter, the WSJ reporter could make a blog himself under another (fake) name and make the rumor himself, then cite his own rumor that way. The possabilities are somewhat endless.

    Still, what shocks me is that we have no real word about this from Google or YouTube (at least not that I've seen, having only read my Techdirt and Engadget RSS feeds all day) which suggests maybe this rumor has some level of merit.

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