YouTube Won't Sell For Less Than $1.5 Billion

Joel from Sydney writes "According to a report in the New York Post, YouTube has informed potential buyers it won't be sold for anything less than $1.5 billion. The report lists Viacom, Disney, AOL, eBay and News Corp as potential buyers. Given that News Corp purchased MySpace last year for $580 million, is this a realistic figure?" From the article: "YouTube's stated business model is to 'pursue advertising,' but potential advertisers might be skittish considering industry estimates that roughly 90 percent of the content viewed on its site violates copyright laws. And at least one giant, Universal Music, is threatening to sue the company if its artists' songs keep appearing there. As it tries to focus on videos that don't use content owned by media companies, it yesterday launched the YouTube Underground, a contest to 'discover the most talented unsigned bands and musicians on YouTube,' backed by Cingular Wireless, Gibson Guitar and ABC's 'Good Morning America.'"

Comments

Re:Web 2.0 ...

[Rob T Firefly]

I'd really love to have seen their pitch to any VC firms

Heh, it seems to me that's the opposite of what they're trying to do. I'd guess they don't want to sell at all, they're willing to stick to their own guns and find a way to make it work. The sponsored contests and recent deal with Warner are steps in that right direction. This whole $1.5B thing seems to be just a way to shut up all the megacorps who have doubtless been peppering them with offers like the rest of us get junk mail.

If someone is insane enough to offer that much, well hot damn! Take the cash and run! Otherwise, they get to go about their business, with a bit more buzz-implied value than before.

Re:1.5 huh

[kalirion]

What, exactly, does youtube have that can't be easily copied?

Popularity?

Re:If you consider Yahoo buying Broadcast.com....

[cowscows]

The thing is, the only thing that YouTube has that really isn't trivial to duplicate is mindshare. There's no incredible technology there. It's a decent service, and takes advantage of increases in bandwidth and the amount of digitized content out there, but the only thing that makes it significantly different from any potential competitors is the number of people who've heard of it.

Now, having that mindshare and brand recognition is certainly worth something, but YouTube itself is a prime example of why that's not as important as they think it is. YouTube grew out of nothing so incredibly fast, as have many other big websites, and there's no guarantee that its marketshare will last. If something better comes along, it will be trivial for the populace to move on to that and all but forget about YouTube.

When/if that happens, what is the owner of YouTube left with? A pile of servers full of a bunch of inactive accounts and a crapload of content that they don't actually own. It seems pretty damn risky to spend 1.5 billion dollars on. With that kind of money and a little determination, I'd imagine you could create quite a few impressive YouTube competitors, and maybe come up with something better.