Google buys youtube for 1.65 billion Dollars

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DVdoctor
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Google decided to take the plunge

http://www.newsday.com/technology/ats-ap_technology14oct10,0,5961742.story?coll=ny-technology-headlines

It is amazing all the comments and perspectives so here goes John's take

Google certainly over paid for the purchase, but they really don't care, because they are paying for it which shares that in industry speak is funny money. The value of the deal is based on the market value of the shares trading. It is important to remember that this is no the price that Google received for the share, but literally what the maret values these shares for when you print them up.

The two founders now have a hugh paper value, but it is in Google stock, stock that they now are quite restricted in being able to sell, and probably a stock that is not likely to show continued massive increase in valuation, so it is a good deal for them but not quite what people might think. IF for instance Google should have problems and the shares drop, then of course the founders will see the reduction if value. Not saying it is definitely going to happen this way, but remember the Time Warner AOL deal. Looked fantastic at the time Steve Case looked like he made a ton of money no one cared that Time Warner overpaid at the time, today it is looked at being one of the worst deals in high tech ever

The fundamental problem at Google, is that Post Eric S. not much of what they have done or invested in or played around with has really worked, beyond the original search and ad revenue deal, most of the rest of the deals have been financial flops.

This all works great as long as the stock keeps going up or stays high. Basically Eric gave away a chunk of Google for a company that so far has no financial model that seems to work. To a certain degree this is back to the Dot.com days where people payed for your customer base and names and cared less about your financial model.

It remains to be seen how the studios decide to allow their content to be stored here, If they are smart they will probably work out a deal and have some advertizing, and be happy and look at it as a missive way to promote their back catalog. Problem is that the studios sometimes seem to think the right way but in other cases get caught up in the insane drive to portect and control at all costs.

IF google with its massive power and ad revenue can break the die hard studios to re think model and go along with this then the industry will have benefited, and the price will be forgotten in the benefit, and Eric will be the hero

IF on the other hand the lawyers decide that now they have a company with lots of cash and decide to start all sorts of legal action, then Eric is in for as the chinese say "interesting times"

Sharyn

rjpobrien
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A lot of interesting points there and "interesting times" definitely lie ahead. Personally I doubt legal action will take place or at least not on a huge scale such as what brought Napster down. The legallity and worth of YouTube has been debated for a long time now and Google know who they are getting into bed with. I wouldn't be surprised if something is already in the pipework as they are not fools at Google.

I think it is a bit unfair to say that most of Google's aquisitions have been flops. Afterall they can't change something overnight. These things can sometimes take years. Google have some very good products and most of all people trust them as a brand (afterall how many people have their homepage as Google or use a search engine other than Google). If anyone can make a financial success out of YouTube, its Google.

Richard

harlequin
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as per
http://forums.dvdoctor.net/showthread.php?t=39745

I hope they do end in court.
People in this country were fined serious ammounts of money for copying tapes with John Cleese etc doing their business sketches , some of which appear to have made it onto youtube. http://www.youtube.com/results?search_query=john+cleese

youtube also has a lot of BBC copyright material , something BBC went nuts over with 'rose' when it slipped out onto the net. http://www.youtube.com/results?search_query=dr+who

youtube claims it removes files when they are in contravention of copyright rules ...... so why are many of the above over 2 months old on youtube.

even new robin hood hasn't escaped http://www.youtube.com/results?search_query=robin+hood+bbc

Gary MacKenzie

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DVdoctor
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It is not just the acquisitions it basically is the only thing that is profitable for GOOGLE is search and advertizing.

The company has a strategy not to have a strategy re products and , it basically is a system of try it and see if it works

We will see

Sharyn

harlequin
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Gary MacKenzie

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DVdoctor
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AH yes just the latest

http://business.guardian.co.uk/story/0,,1921154,00.html

One thing, Google definitely has the resources and the market clout to sort this all out

Sharyn

Butrus
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The interesting and exciting thing for me is simply the amount of media attention and debate this deal has generated around video on the internet. It actually helps my case considerably when talking to customers about how to distribute their shiny new corporate video. Many of them are still quite conservative and think the role of their website is to act as an electronic billboard. The more progressive thinkers have often been discouraged in their attempts to offer rich media - main reasons being slow connections and a steep technical learning curve. But these practicalities are evaporating a little more every day.

If YouTube has done anything, it's shown how video on the internet can be EASY. And if this deal has done anything, it's brought a possible future scenario into the minds of a very large public audience. I share a vision with many others of the internet soon becoming a de facto interactive television channel across the globe (or at least in areas where fast broadband becomes the norm). This promises great opportunities for my customers, and hopefully a real surge in demand for professionally produced video.

mooblie
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I must agree, Butrus. Even being supposedly "in the know", I was initially apprehensive about the technicalities, possibilities and customer acceptance of video on the web. It turned out, after some experimentation, to be much, much easier, quicker and cheaper than I had possibly hoped to put sample clips on our website. And, I have to add: they are "better" than I expected, too.

YouTube has only helped popularise this, and made it seen quite normal to view video clips on the web, to all our benefits.

Martin - DVdoctor in moderation. Everyone is entitled to my opinion.

harlequin
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Youtube will cause tighter rules to be enforced over internet video.
The blatant 'illegal' postings which youtube left on for months , and even the search word 'BBC' would show them how many the poster had no right to , with them declaring they did remove when told , will not help us now.

Many wedding videographers websites i've seen use commercial music in them , which without relevent licences , is also illegal , but i think was ignored because it was too much hassle to chase .......

If Time Warner have decided to go on the hunt ...... it will be court cases , if only for the uploaders.

They have spare cash £370m after selling off 'AOL' in the UK , so may wish to use it wisely.
http://news.bbc.co.uk/1/hi/world/6039740.stm

Gary MacKenzie

sepulce@hotmail.com ( an account only used for forum messages )

Thinkserver TS140 , 750ti Graphics card  & LG 27" uws led backlight , Edius 8

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DVdoctor
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I agree with Gary, that the legal path is very likely, BUT and this is a possibility, is that with Google being so powerful a brand, and so massive a revenue generator, that some sort of generic revenue generator is worked out, and that some sort of fair use policy is worked out with some sort of revenue sharing

After all hollywood and the rest of the folks drive for copy control is really all about revenue.

So if the choice were for instance for BBC to have the stuff simply be hard to track down on pirate sites, or be promoted and displayed for the millions and millions of visitors and at the same time get some dosh... they might change their minds

We will see

at the end of the day it is really greed that drives most of the decisions so the balance of starting a legal battle that removes your content, and gives you no revenue, vs a deal that allows your content and gives you some revenue might have a different outcome
look what I tunes did for music downloads
Sharyn

rjpobrien
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I think you've hit the nail on the head Sharyn and I think Google know this too. Hopefully this will be just the beginning of how we access and share media. While your comments about Google's revenue coming from Search and Advertising are also spot on, the great thing IMHO about this purchase is that Searching and Ad placement is so easy to implement on a site like YouTube while at the same time, once done successfully, can only help build the Google brand.

Richard