Google Decides YouTube Is Worth $1.65 Billion In Play Money Plus Any Additional Legal Hassles

from the they-did-it dept

After a lot of rumors over the past few days, Google and YouTube made it official, as the online-video site has sold out for $1.65 billion in Google stock. The sale represents the successful execution of the Skype strategy of using the media to seed the idea that the company was worth so much. Seeing as Google spends so much already on its infrastructure and bandwidth, this should put to rest any discussion of how much it costs YouTube to host all those videos. The next worry, of course, is making nice with the content owners, something that the company been pursuing actively. Just today, the site signed deals with Universal, CBS, and Sony BMG. The challenge is not just to get the entertainment companies on board, but to do it in such a way that allows YouTube to remain cool; this was what Napster failed to do when it went legit. Obviously, $1.65 billion is a high price to pay for a young company with an uncertain outlook, but it's known that Google sees big things for online video, and so far hasn't had much success in the space. There's bound to be a lot of pundits giving their thumbs up or thumbs down to the deal. One of the most outspoken on YouTube is Mark Cuban, who of course has a lot of experience with billion-dollar buyouts of video companies. He said this weekend that this deal would be beyond moronic, and that Google can expect scads of lawsuits, not necessarily from big content companies, but from small copyright owners looking for somebody to sue. Now we get our chance to see if he's correct.

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  1. identicon
    FreeHear, 9 Oct 2006 @ 8:36pm

    Re: Re: Re: Someone mark your calendars

    Of course, I can dg that. but... WTF does youtube have to do with it? that can already happen with google video.

    We'll have to see what Google does, but from my vantage point, YouTube can remain "YouTube" (sans consolidation) while google benefits from the audience and strategic control. Google knows the numbers involved with YouTube as much as with its own website. As watchers of sites like Digg notice, when comparing it to an cloned offering like Netscape, numbers of "engaged" uses make a significant difference to the quality and possibilities inherent in the portal itself. YouTube users are so enamored and in love, they've written songs about it (my favorite is the one with the stuff animals [click]).
    As for your insight into myspace... it still doesnt know how to make money. its getting there... and its masses are leaving. so uh.. lets see how "you" feel about it in a year.
    You bet. A friend of mine is also placing bets against MySpace being any form of "player" 5 years from now. My bet...? It will be with shades of difference. Honestly, "Friendster" was a splash in the pan from what I could tell. Things like YouTube and MySpace have achieved a whole other level of attention and media inclusion ( movies, tv, music... you name it, they've appeared in it ).

    On a side note, it's kind of ironic that all of these websites seemed to get popularized by attached scandal.
    Digg - Paris Hilton's cellphone numbers
    YouTube - Massive copyright infringment (Lazy Sunday) and lack of business model
    MySpace - Pedophiles and online predators

    Maybe Friendster should have tried a little harder to stir up some trouble. They should be ashamed. We certainly know Michael (Lindows/ Robertson gets it.

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