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What Could YouTube Be Worth?
An anonymous reader writes "C|Net has a story about the possible cost of YouTube. Sony just paid $65 Million for small-time videosharing outfit 'Grouper'. That site has around 1% of the videosharing market. The article asks, at that price, what might YouTube's 43% be worth?" From the article: "Entertainment analysts have predicted in recent weeks that sites with large followings would command a high price. The Sony deal proved them right. But while the Grouper deal helped establish a benchmark, there is still plenty of confusion about the fair value of online video companies. This is because the typical metrics for measuring a company appear to have gone out the window--just like they did during the bubble years of the late 1990s."
Here's my brilliant Web 2.0 business plan:
1. Copy YouTube idea
2. Rename it PornTube
3. ???
4. Profit !!
-- "It's not stalking if you're married!" My Wife.
Ohhh I love maths questions!
Sony just paid $65 Million for small-time videosharing outfit 'Grouper'. That site has around 1% of the videosharing market. The article asks, at that price, what might YouTube's 43% be worth?
I would think the answer is $65m * 43 = $2,795,000,000.
I'll probably be modded down for this...
I'm thinking $2.795 Billion.
This is some sort of trick question, right?
950M, 650M, 250M, 250K. It's pulling 20gbps of data and has millions of eyes watching ad-ready video players.
It's only worth what it can make in a reasonable amount of time, and that time is growing short as video blogging competitors build their userbases.
Eventually their huge market share will begin being split by competiing sites that slightly beat their technology, and then the value starts to fall...
Video for Online Dating Profiles
done!
Mooniacs for iOS and Android
Soon, Old Television shows and Movies will be offered on various sites as the rights are given out. Eventually you'll be able to watch any show or Movie that's ever existed. Then after this happens, a connection to your television or special television will be created that will let you watch anything that's every existed at your will.
These amatuer home videos are just the beginning. Eventually all professionally done shows will be available. And maybe there will be an indy uprising of stuff that wouldn't get on TV, but will be seen on the net. Actually that's already happened, but I believe amatuer stuff will become more refined over time.
God spoke to me.
dotcom 2.0 crash, here we come! Wheeeee!!!!
what's the motivation here? to keep an eye on what media people have on their pc to share?
It's important to realize that Grouper was founded by Josh Feltzer of spinner.com fame.
In other words, Sony didn't buy Grouper for $65 million, Josh Feltzer sold Grouper for $65 million.
Don Negro
Perl 6 will give you the big knob. -- Larry Wall
Aka http://channelchooser.com/adult.php
This post climbed Mt. Washington.
If Youtube doesn't get some more VC soon to pay their estimated $1mil/month bandwidth costs, they may be worth nothing more than 600 or so servers. http://blog.forret.com/2006/05/youtube-bandwidth-t erabytes-per-day/
Keep in mind that article was written in May... Bubble 2.0 can change a lot in 3 months.
Funnypics
1. Create internet fad.
2. Get bought out. (Profit!)
3. there is no step 3
Step 2 might be expanded "get bought out by people with more money than understanding of internet fads". But really, after step 2 who cares about step 3? That's for the new owner to worry about.
Start Running Better Polls
Sony apparently made this acquisition for Grouper's technology. The website was an added bonus. Idiot journalists should leave valuations to professionals that do valuations for a living. It's a lot more complicated than "marketshare" and eyeballs.
Here I click on that and see the log:
'Maple Leaf Rag - Short n' Messy' is certainly the kind of video many Americans will apreciate.
Won't anyone think of the children!
Obama likes poor people so much, he wants to make more of them.
Entertainment analysts have predicted in recent weeks that sites with large followings would command a high price.
In other news, Entertainment analysts also predicted unanimously that tomorrow the sun will rise. Other predictions include that next week will have exactly 1 Monday and that Elvis and Jimmy Hoffa will not be candidates for the 2008 Presidential election.
More at 11.
"You will pay for your lack of vision..." - Emperor Palpatine to Ray Charles
but it's a major difference between grouper and YouTube. The folks who created grouper built DRM into their schemes, creating a ready-to-use widget for some big media company to scoop up and plug into their (flawed) strategy. YouTube, not so much. Lotsa eyeballs, but so far just another iteration of
1. Build a ____ sharing site.
2. ???
3. Profit!
Copyright owners are finally starting to sue YouTube. Interestingly enough they are using the Grokster ruling, that "companies could be liable if they were found to induce the infringement in some manner."
Their terms of use say that users are responsible for any content posted. However, if I had a copyright on something posted I'd rather sue the company worth possibly billions than go through the hassle of hunting down a user.
I haven't really heard about too much of this, so they are probably doing a pretty good job of taking down offending clips, but when lawyers smell money in the water, look out.
//TODO: Insert catchy phrase
Even if YouTube were to go bankrupt tomorrow, someone would still pay *big* bucks for their domain name. Probably someone like Google, Yahoo, or MS.
Every time you post an article on Slashdot, I kill a server. Think of the servers!
I was wondering about that the last time I was on YouTube. "How the hell can they get, much less pay for, that much bandwidth?" Music is one thing, but video takes a whole lot of bandwidth. I have to wonder the same thing about anyone who even thinks about doing HDTV over the internet. Only the ISP could realistically provide that... which in many cases means the cable companies... which really doesn't change the service a whole lot.
Anyway, about YouTube... how do they make their money anyway? Do they have ads? (I have adblock, so I wouldn't know). I know they put movie trailers up and now some stupid Paris Hilton thing. Is that enough?
-matthew
"THERE IS NO JUSTICE, THERE IS ONLY ME." -Death
Just put some ads on there and see what they sell for.
Anyways this ISN'T like search engine technology.
It's WAY TOO EASY to copy what youtube is doing.
The competitors are already taking their share.
And the first one in a particular market segment that does it right gets a heavy share. Look at the iPlod.... My(gonad)Space... and many other interesting ideas.
The problem: no revenue model for it yet. The great thing: easily understood and manipulated. Now there are many knock-offs, including PornoTube, and so on.
What's it worth? With little intellectual property, not much except in future revenue potential. Some aging media king, like Sony, ought to buy them and lose lots of money on them, like TW did with AOL.
Seriously folks, until a revenue model appears, it's just cool, not worth much
---- Teach Peace. It's Cheaper Than War.
However if the youtube and its imitators replacing the Akimbo service and the other video delivery services they might be in the money. But video content producers are so vary of delivering it via the internet, I wont be holding my breath.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
Probably more, because I actually have money, pay for my own ISP connection, own a house, etc. On the other hand, I am not TOO young, so maybe I am not the "money" demographic. Heh, The way things are going in the US, the "money" demographic aren't going to have any -- it is all going to be sucked into retirement benefits for "us", soon (whether we need it or not!).
This issue is a bit more complicated than you think.
Isn't digital cable already using IP for the MPEG2 stream?
The Christian Right is Neither (Christian nor right). See: Matthew 23, Matthew 25, Ezekiel 16:48-50
I'm just going to go out on a limb and assume that Sony wouldn't spend millions on a website that's losing money.
We should always remember the tens of billions of dollars poured into the giants of Web 1.0 like Tripod.com, geocities.com, go.com, and Lycos.com. The venture capitalists always put their money where their brain is.
"...because like, you know, like well, it's hard to explain but like it's really good, y'know."
.com boom. It seems
Yes that's enough from some silly teen bimbo shaking her backside on YouTube and thinking she's made a revolutionary discovery.
What's it worth? Very little. Probably a little for the interface, a little for the interface, and a little for the brand name recognition. What will greedy morons pay? Who knows! Stopped trying to predict that during the
These posts express my own personal views, not those of my employer
and that is because you don't know Sony.
Didn't I just read an entire thread on /. discussing the bad business decisions that Sony has made?
A positive attitude may not solve all your problems, but it will annoy enough people to make it worth the effort.
"By agreeing to pay $65 million for Grouper--a profitless video-sharing company with negligible market share--Sony..."
If by profitless, they mean loss-making, then yes, they would spend millions on a site that's losing money...
while the domain name itself would be quite valuable initially.. if the content that replaces the defunct website isnt appealing to the origional audience.. they would quickly find their videos somewhere else.. kinda like if slashdot was bought out and replaced with a video gaming only website.. some people would stay.. but most would go elsewhere.. as their interested in the "nerd" aspect of /.
Really, what made YouTube a success?
IMHO, it's soooo easy to watch the videos and share the videos. It used to be a royal pain to put video on your small or personal website. Real Audio? Windows Media? Quicktime? They were all problem prone. The odds of having those work for more than... oh, 70% of your viewers was slim at best. OS support, plugins working, and having the server side software -- it was all a mess. Never mind the bandwidth requirements. YouTube made it easy. Since more than 90% of people have Flash installed, and Flash video seems idiot proof (to watch), the whole video thing is now practical. Plus YouTube provides the bandwidth, and cut-and-paste HTML for sharing.
In hindsight, it's a simple concept, executed well, and with good timing. That said, I wouldn't spend a billion for it. I don't think people care where they host their videos as long as it's free, quick, and easy. I doubt that many people actually browse YouTube, so switching costs for video sharers and viewers is pretty much zero.
The reason nobody will buy YouTube is because it would cost too much when compared to them just buying a little outfit nobody has heard of, fixing it up a bit, and saying to the world HAY GUYS WE HAVE A YOUTUBE THING TOO!
2.8 billion is around 2.5% of Google's market cap. If you asked a Wall Street analyst if they attributed 2.5% of Google's market cap to Google Video, they'd might say yes, based on the hopes that Google will be able to monetize it someday.
Another way to look at it: CBS Corporation has a market cap of 22 Billion. CBS owns all sorts of businesses, I haven't done the math to estimate what % of the market cap would be attributable to the CBS broadcast network and the fully-owned affiliates, but I wouldn't be surprised if its something like 10-20% of CBS ... which puts it in the
range of the 2.8B YouTube
estimate.
No one will buy YouTube because the company that buys them will be the instant winner of hundreds or possibly thousands of copyright lawsuits. Right now there is basically no incentive to sue YouTube because you can't extract much cash from them. But what if Google/Ebay/Yahoo owned YouTube? Well, now you have a nearly bottomless well of cash to go after, and since the offenses would be so trivial to prove, its free money.
Any company with the cash to buy YouTube is going to decide in the long run it isn't worth it.
"The venture capitalists always put their money where their brain is." You mean... up their buttocks?
I Haven't Seen This Few Posts Since Winston Churchill Advocated Spam!
Hype up the site by posting related article on Slashdot, in which you compare the site with another, of lesser value, cite a figure for the lesser-worth site, estimate that site-you-want-to-pump is worth 10 times that much. This is a classic public relations recepie to hype up an industry. Paul Graham, anyone?
----
you tube should go for a billion atleast ... it popularity is on increasing side ... if facebook can collect a billion then youtube deserves it ...
however you may encounter some branding issues with these guys: http://pornotube.com/
Superb Hosting
ok. what's a potato worth? It depends who's doing the buying. To me, I'd take a look at their debt, their revenue, the wholesale copyright infringement and say not a whole lot.
Deleted
That rounds out to about 1 tank of gas.
I find that it's occasionally worth a look.
How does YouTube make money or plan on making money?
load "linux",8,1
Well, I'm no MBA, so I don't really know, but from what I do know about business. . .
At 43% of the marketshare, it's *harder* to grow than at 1% of the market. Granted, this is a *market* that is still, itself growing, so the 2.75B estimate might be reasonable, hell. But, generally speaking, the price of a company is based in part on it's ability to grow it's revenues and marketshare beyond it's current level.
Would it be possible for Grouper to grow it's market share 20 times? Yes, reasonably that is possible. Would it be possible for YouTube to grow it's market share 20 times? *Maybe*. . . but much, much, less likely (although, again, because the internet video market is so immature, there is potential there). While YouTube should certainly be worth more than Grouper, should it be worth 43 *times* the amount of Grouper? I doubt it.
Nope, just raw broadcast MPEG2 frames. IP is encapsulated in those frames in the case of cable internet. It is actually reversed. MPEG2 is uses for IP instead of IP being used for MPEG2. If that many any sense.
-matthew
"THERE IS NO JUSTICE, THERE IS ONLY ME." -Death
I'll go on a limb and say that Sony is a really good company that rarely makes any planning mistakes.
I don't think this is the first time a 'profitless' company has been bought by a larger company. It would be cheaper to buy the failing company and pump some life into it than to set it all up from the ground up. Gives them a good opportunity to get into that market.
Now if Sony can do all that, that is a whole new discussion.
From stock@stokkie.net Mon Aug 14 22:46:00 2006 +0200
Date: Mon, 14 Aug 2006 22:46:00 +0200 (CEST)
From: "Robert M. Stockmann"
To: list
Subject: 911 Economics
Hi,
According to Dave Emory, the Muslim brotherhood is propagating a economic agenda which closely fits the Bush regime. Do the Bush and USA bashers inside the middle east know that themselves also?
July 18, 2006: FTR # 560: Economic 9/11
http://archive.wfmu.org:5555/archive/DX/dx060718.m p3
There seems to be a entire economic system installed throughout the middle east, where the fundamentalist Muslim stooges of the Muslim Brotherhood are put in power and apparently easily adopt the laissez-faire tradition of Western economics.
Unbelievable how bended this sounds. How bended?
Well Dave Emory, the instituted propaganda radio broadcaster starts reading, without showing any reservations or hesitations, a Newsweek article on this, like it was a Goebels lecture. Using the same methods and principles he apparently tries to fight :
"Islam in Office"
By Stephen Glain, Newsweek International, July 3-10, 2006 issue
http://msnbc.msn.com/id/13529579/site/newsweek/
"July 3-10, 2006 issue - Judeo-Christian scripture offers little economic instruction. The Book of Deuteronomy, for example, is loaded with edicts on how the faithful should pray, eat, bequeath, keep the holy festivals and treat slaves and spouses, but it is silent on trade and commerce. In Matthew, when Christ admonishes his followers to "give to the emperor the things that are the emperor's," he is effectively conceding fiscal and monetary authority to pagan Rome.
Islam is different. The prophet Muhammad himself a trader-preached merchant honor, the only regulation that the border-less Levantine market knew. In Muslim liturgy, the deals cut in the souk become a metaphor for the contract between God and the faithful. And the business model Muhammad prescribed, according to Muslim scholars and economists, is very much in the laissez-faire tradition later embraced by the West. Prices were to be set by God alone anticipating by more than a millennium Adam Smith's reference to the "invisible hand" of market-based pricing. Merchants were not to cut deals outside the souk, an early attempt to thwart insider trading."
Bill Gates must be delighted to hear about such juicy business deals laying ahead for him in the future. Bill Gates? Don't you know Bill Gates owns newsweek? :
[jackson:stock]:(~)$ nslookup www.newsweek.com
Server: 10.0.18.71
Address: 10.0.18.71#53
Non-authoritative answer:
www.newsweek.com canonical name = newsweek.com.
Name: newsweek.com
Address: 207.46.245.32
Name: newsweek.com
Address: 207.46.245.33
Name: newsweek.com
Address: 207.46.150.50
Name: newsweek.com
Address: 207.46.150.51
[jackson:stock]:(~)$
[jackson:stock]:(~)$ whois 207.46.245.32
OrgName: Microsoft Corp
OrgID: MSFT
Address: One Microsoft Way
City: Redmond
StateProv: WA
PostalCode: 98052
Country: US
NetRange: 207.46.0.0 - 207.46.255.255
CIDR: 207.46.0.0/16
NetName: MICROSOFT-GLOBAL-NET
NetHandle: NET-207-46-0-0-1
Parent: NET-207-0-0-0-0
NetType: Direct Assignment
NameServer: NS1.MSFT.NET
NameServer: NS5.MSFT.NET
NameServer: NS2.MSFT.NET
NameServer: NS3.MSFT.NET
NameServer: NS4.MSFT.NET
Comment:
RegDate: 1997-03-31
Updated: 2004-12-09
[some parts removed of whois query]
# ARIN WHOIS database, last updated 2006-08-13 19:10
# Enter ? for additional hints on searching ARIN's WHOIS d
SOD off.
We at SONY are too busy making exploding batteries. No time for
y'allTube.