Google Buys YouTube for $1.65 billion

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Google, the Internet's leading search engine, announced Monday that it is buying popular online video site YouTube for $1.65 billion in stock.

YouTube, which was founded in February 2005, has quickly become the most well-known of several online video sites. More than 100 million videos, many of which are short videos created by the site's users, are downloaded a day on the site.

According to Internet research firm Hitwise, YouTube has about a 46 percent share of the online video market.

For Google (Charts), the purchase of YouTube gives the company the ability to tap into the potentially lucrative online video and social networking markets. Some analysts have criticized Google for relying too much on advertising tied to keyword searches.

The combination of Google and YouTube could further strengthen Google's dominance in online advertising, giving it an edge over rivals such as Yahoo!, Microsoft's MSN and News Corp., which owns the social networking site MySpace. Some analysts said Monday that Yahoo, Microsoft and News Corp. also had probably expressed interest in buying YouTube.

In a statement, Google said that YouTube will operate as an independent unit of Google once the deal closes and will retain the YouTube brand name. The companies added that no YouTube workers will lose their jobs as a result of the acquisition and that Google will maintain its own online video business.

View: Full Article @ CNN Money

(1 reply) #1 SMeK on 09 Oct 2006 - 20:47

wonder if they will keep video.google.com or if they will redirect it to youtube

#1.1 virtorio on 09 Oct 2006 - 20:57

Quote -

The companies added that no YouTube workers will lose their jobs as a result of the acquisition and that Google will maintain its own online video business.

#2 lerum on 09 Oct 2006 - 20:51

I hope they don't start charging for views on youtube (or gootube?

)

#3 ambiance on 09 Oct 2006 - 20:53

Hopefully they will keep both, so one can be downloadable, and the other not, but infringe on copyrights. (Even though I can still download)

#4 DarkSim905 on 09 Oct 2006 - 20:57

Anyone know how this will affect stock; or should I be worried? ..

(1 reply) #5 xxpor on 09 Oct 2006 - 21:03

holy **** this is crazy! its was so ovious it was coming, but its still a big shock.

#5.1 RiVaLSSJ on 10 Oct 2006 - 04:08

What's more of a shock for me is that website can be worth 1.65 BILLION :|

#6 dagamer34 on 09 Oct 2006 - 21:18

So this is how you get rich in the 21st century: Create some cool website and then wait for Google, Microsoft, or Yahoo! to buy you and you'll never have to work again!

Honestly now, these kinds of actions are what created the bubble economy of the late 90's.

(4 replies) #7 LOC on 09 Oct 2006 - 21:19

Damn, all the big "wigs" on the net were freaking out over this, saying how it was a bad idea, Google is making a mistake blah blah blah.

Yeah, eat that naysayers! I say kudos to Google for being forward thinking, and big kudos to the YouTube guys, I mean really, they be really rich now. More richer than they were, rich rich.

#7.1 davemania on 10 Oct 2006 - 02:18

Mark Cuban made some valid point against YouTube. You have to ask how Google will make a profit out of YouTube because 1.65 billion is a huge investment.

#7.2 crudel on 10 Oct 2006 - 03:45

Quote - davemania said @ #7.1

You tube is not only making money with advertisements and page views. There's a ton of information that site can gather about it's users, it's not even funny. And those infos are worth quite a load of money. I guess this will tie in with google ads in some way to show users ads they are even more likely to click/pay attention to.

Still a lot of money, but this move was a good one on google part if you ask me.

Just my 2 cents.

#7.3 Autoexec on 10 Oct 2006 - 08:20

YouTube is phenomenally valuable in terms of traffic and in the Internet sector this is important just like location is important in real estate.

Just think how much revenue google will be able to create from Adwords being on YouTube....

The visitor numbers are crazy from Aug 05: 0 to Aug 06: 80.000,000

#7.4 lbmouse on 10 Oct 2006 - 17:43

If I was Google (and my banker really wishes I was) I'd be more worried about being left vulnerable to copyright lawsuits than making a profit off of youtube. Business week has a good article on the subject.

Google is an awfully juicy target for overzealous content providers to take a shot at.

#8 sagy on 09 Oct 2006 - 21:32

Maybe it is a smart move, maybe Google has something really big in mind - maybe advertising business again?

Oh well.. good job G.

Now please excuse me, I am gonna have to think about something creative to impress big companies

(2 replies) #9 Sp3ctranova on 09 Oct 2006 - 21:36

Althought it's unlikely, maybe we'll see higher quality vids..?

#9.1 dandin1 on 10 Oct 2006 - 00:02

Quality? As in video format, compression and dimentions? Or do you mean that you don't like the videos on it? Because users sumbit the videos, not the owner of the medium.

Last edited by dandin1 on 10 Oct 2006 - 00:13

#9.2 BBinder on 10 Oct 2006 - 10:00

i think he means when u upload a video thats something like 340 x 320 it gets pixellated to hell

(4 replies) #10 Section 31 on 09 Oct 2006 - 21:46

$1.65 billion is alot of cash. wait, they did receive the money in cash right?

#10.1 LOC on 09 Oct 2006 - 21:58

You are kidding right?

#10.2 Buttus on 09 Oct 2006 - 22:45

Quote - Section 31 said @ #10

yea, they just drove a few semi trucks full of $100 bills over to their office...

#10.3 RiVaLSSJ on 10 Oct 2006 - 03:56

Quote - Buttus said @ #10.2

...I wanna be the driver of that truck

lol

#10.4 Xavien on 10 Oct 2006 - 14:42

i'd steal a few hundred of them... i mean they wouldn't miss it right?... counting $1.65 billion to see its all there would take a very long time

#11 Galley on 09 Oct 2006 - 22:35

They gave them stock, which is probably better than cash.

#12 GreyWolfSC on 10 Oct 2006 - 00:16

Yes, you can wipe your rear with stock when it becomes worthless... That'd be defacing currency if it were cash.

(1 reply) #13 wildduck on 10 Oct 2006 - 00:55

Welcome to GoogTube

#13.1 RiVaLSSJ on 10 Oct 2006 - 03:54

Tube'le'Goo

#14 Toxicfume on 10 Oct 2006 - 00:56

I hope Google adds downloading videos for ipod and psp formats to YouTube.

#15 mattrobs on 10 Oct 2006 - 02:37

Does that mean all the copyrighted videos will be gone? (what's that, a good 25% of YouTube videos?)

(2 replies) #16 astrokat on 10 Oct 2006 - 03:41

Youtube is less then a year old. This is amazing!! I wish I thought of this.

#16.1 RiVaLSSJ on 10 Oct 2006 - 03:54

It is :| I thought it's been around for a lot longer than that :|

#16.2 MaceX on 10 Oct 2006 - 04:14

no, it's a little less than 2 years old (20 mo). Still it's pretty amazing that it can be worth that much money.

#17 altermind on 10 Oct 2006 - 04:54

how is youtube worth 1.65 billion.. no way it earns even 1/10th of that =/

#18 eilegz on 10 Oct 2006 - 05:05

well google its wasting too much resources, be careful they become the next AOL or Yahoo, too much things and less focus on what its important for them

#19 Shadrack on 10 Oct 2006 - 05:20

It is hard to say what is motivating Google by this move.

And I agree with eilegz, Google may implode on themselves because they lose focus.

#20 NightmarE D on 10 Oct 2006 - 05:58

Another reason I never go to Google.

They can talk all their trash about Microsoft all they want about buying up companies left and right. They're starting to do it also. I'm also glad I'm not the only one who thinks 1.65 billion for YouTube is just way too much.

#21 rbet on 10 Oct 2006 - 09:14

To all the geniuses that think $1.65b is too much: I agree it's a lot and it's a shocking figure. But I am assuming that the dudes at google -- smart as they are -- just didn't pull that magic number of $1.65b out of their collective asses. No sane individual or company just doles out money; there are calculations of future projected income involved.

Think about this: does YouTube have any decent competition? Check out the statistics:
100,000,000 video views per day
65,000 new videos uploaded per day
2,000,000 unique visitors per month

Are these numbers small?

And why do you guys have problems with Google/MS/etc. buying up companies? What else are they supposed to do with their cash and stock reserves? I am all for it; this is the essence of capitalism and why it is such a beautiful concept. Good ideas + Good implementation + Mass acceptance = $$$

Disclaimer: I am no MS/Google/YouTube fanboy.

(1 reply) #22 guruparan on 10 Oct 2006 - 09:33

Google is doing a bad thing...they are getting into LOT of new business deals..which wont live for long...I saw an article about eric..He said that "dont bet on internet"..& PC will be no more...(criticising microsoft)!...

Hey Googlers..listen...
Internet is a part of current technology & not a technology itself...

Ever windows,linux or mac boots from our internet connection..

we play Halflife 2, age of empires , need for speed games only using 3d graphics card, not using the internet..

Check what the price we need to pay if we are using web 2 application..(total bandwidth we use)..for the price compared we can get a new version of office itself..

I dont like companies BUYING the branded technologies..rather stay with your own & enhance your apps..!
(i am not a microsoft, youtube or google fan!

#22.1 Xavien on 10 Oct 2006 - 14:43

he said dont bet against the internet, not dont bet on the internet.

(1 reply) #23 xploit1030 on 10 Oct 2006 - 11:09

I think this is a bad deal for google. Yes youtube is making plenty of money on advertisements now but google will have to do alot of work to clean up all the copyright infringment on that site. Plus once all the copyright infringment stuff is gone I don't see youtube being as popular as it currently is.

#23.1 Magallanes on 10 Oct 2006 - 12:21

Youtube ideology is "is legal while nobody argue about it" and i think that it's works but i don't sure if for US's court it will be legal (remember the americans trend to be sue-maniacs).

Anyways, youtube is not popular only because copyrighted material, also by the speed. Google videos trend to be big, and google video the real point is to sell it, so they don't really care about the free videos.

#24 curme on 11 Oct 2006 - 03:05

I read in 'WIRED' magazine that Google had a chance to buy MySpace before Rupert Murdoch did, because Google thought that could do it better.

That sounded pretty cocky to me, and maybe Google learned their lesson. Sometimes you can't beat the competition, you have to 'Google' them up!

#25 DaViD_BRaNDoN on 13 Oct 2006 - 12:48

Anyone knows the reason of why YouTube uses YouTube as it trade name?

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