Google buys YouTube
On Monday, Google bought YouTube for $1.65 billion . The deal confirms that web 2.0, many-to-many, community-driven sites have massive commercial appeal. As Google’s own profits indicate (roughly $400m per quarter - so, the YouTube buy is pretty big, even by Google standards), there’s a lot of money to be made from online advertising. High traffic sites, that provide some profiling on users, are effectively online gold mines. Deals like this will signal a landslide shift from offline to online marketing.
I guess Google know what they’re doing, but I think it may have been their first significant strategic mistake. Google has made its reputation on its neutrality as a content indexer (but see previous post on Googlebombing for example of Google bias). But now it’s bought a major content distributor, it’s in effect poacher turned gamekeeper, and you can’t be both.
Moreover, in terms of the YouTube acquisition, it’s difficult to see the case for the $1.65bn price tag. YouTube has been likened to Napster pre-litigation. And surely litigation will come, as the site carries masses of copyright infringing material.
Still, the investment does signal that the rate of change is accelerating, hang on to your seats!
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