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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.'"
It won't sell for under 1.5b. It won't sell at all. Welcome dot-com bust 2 point oh.
The masses are the crack whores of religion.
When you've gotten so big that people are afraid you're controlling free speech and the press, then I don't think $1.5 billion is too much to ask.
Remember, the CEO of News Corp is Rupert Murdoch. Everything you see with the Fox logo is his. Its yearly revenue is around $24 billion. "News Corp" is a nice generic name that no one remembers while it's holdings grow out of control. Whenever you see Fox or Myspace or anything listed in the link above, you should be thinking one thing: "It's all News Corp under the direction of one man."
Pretty scary when you think about it.
My work here is dung.
Let's see... Internet company... flaky business model... outrageous amounts of money... well, my time machine works -- I must be back in 1998!
GetOuttaMySpace - The Anti-Social Network
... so now we've got
;)
1. Create service
2. Get other people to violate copyright with your service
3. Avoid Lawsuits
4. ???
5. Profit (or at least $1.5B)
I'd really love to have seen their pitch to any VC firms
"If A equals success, then the formua is A=X+Y+Z. X is work. Y is play. Z is keep your mouth shut" - A Einstein.
for about $2B, then it's not so much. And Broadcast.com (Mark Cuban's "invention") didn't really work yet. And I'll bet he's grousing that his current HD venture can't get that figure because it's not as evolved, and certainly not as popular as YouTube.
The price is huge, but it's not out of line with web-based social properties. Not that it's fair.... but the future revenues if it's managed well could be very big.
---- Teach Peace. It's Cheaper Than War.
They want their business model back.
-- Fugacity: Confusing chemists since 1908
Really, enjoy it while you can, because the record companies will sue YouTube into the ground. Soon.
So this company will not be worth anything in a year.
True, but isn't the price difference Content vs Distribution?
I'd assume that content would always surpass the value of distribution, but maybe that's what's changing.
"If A equals success, then the formua is A=X+Y+Z. X is work. Y is play. Z is keep your mouth shut" - A Einstein.
....pay for the bandwidth. How do they manage to pay for it now? I'd love to see some figures on their revenue vs costs.
Can I borrow your chicken for a while...?
I think we can keep recursing like this until someone returns 1
Or, to put it another way, I think there are better alternatives to suing and the record companies have figured this out. When they sued Napster, Kazaa & eDonkey and then started suing users, I don't think their profits went up. I mean, they might have gotten a few million from the companies and a few thousand from the users that year. But they destroyed something that they could have taken advantage of. Most industries would kill for an infrastructure of people acting as their own marketing tools spreading their product around. Now, it was illegal because the product was being copied illegally. But if the record companies could have taken a look at the business model and adapted it to suit their needs and sued for the ability to call the shots instead of just pure cash, I think they would have come out further ahead in the long run.
You see, if the record companies looked at YouTube and tried to drive them in the ground, they'd only be trying to suppress something that has come about naturally. Why don't they just claim what is theirs and demand all the copyrighted material ad revenue goes straight to them? Why don't they try to work something out with YouTube in an attempt to generate a recurring income? I mean, surely YouTube can keep the quality down on the work or restrict it to certain songs so that people will feel compelled to purchase CDs/DVDs, can't they?
I think YouTube is like a wild stallion and the record industry is afraid of it. They can either shoot it dead (but that will just spawn more) or tame it and generate a steady income from it.
My work here is dung.
give me some of what they are smoking, zero revenues, zero profitability, zero commercial trade secrets/competitive edge.
for $500m I could replicate You Tube in 3 months.
dotbomb 2.0 - how short are peoples memories?
Dean Collins
www.Cognation.net
Here's the problem though. Pixar actually brings in money. Youtube is just an audience without any product. Advertising only brings in so much.
Roger Taylor (The drummer from Queen) wrote an excellent song about Rupert Murdoch, to be found on his 'Happiness' album.
Check out the Lyrics
<Dr Evil> We will keep showing asians lip-synching Backstreet Boys unless you pay us... a kajillion trillion dollars!</Dr Evil>
Rubbish, those site will continue doing business for a long time, while there potential for profit is almost certainly being over hyped there is obviously a huge market for the services they provide.
Youtube will always show copyrighted material even if its just the stuff that media companies use to hype new shows. There is also an emerging video download market which they could tap into and of course marketing.
Myspace is used by a huge amount of people to keep in touch with there friends and find out about new bands and such. They already make money from adverts but they could start selling music and concert tickets online. Also there a massive market for targeted marketing which they could embrace so companies could advertise to people who are very interested in there products.
Wikipeida is a donation based service which is very cheap to run.
Which can be really dangerous. It might just backfire.
I had that experience myself, asking once for about 5 times the regular price on a service I really didn't want to execute. Guess what ? They said yes.
Moral of the history: if you are going to overprice so you get a "no", make sure your price is so high there is absolutely no chance they will say yes.
I should have asked 20x, not 5x. YouTube should be asking for $100bi is that is what they want (not to sell).
morcego
I'd take any offer over $50m. Youtube is Napster's legal problems with far less ground to stand on since they host the videos on their servers.
There are a lot of eyes looking at YouTube... supposedly 100 million videos watched a day. Even so I have my doubts as I feel the people that watch YouTube just want to watch videos and have no loyalty specific to YouTube. Admittedly they made web videos easy (no plug ins for QuickTime, Real, or MSN) and got people to embed videos on other sites. However I get the feeling that if YouTube craters due to copyright suits, or the company that buys them sticks ads all over everything, people will just start watching videos on some other site. So YouTube may be a good buy at first but then the parent company will inheret all their copyright problems and bandwidth expenses... so I feel the price is really high. I will predict it will be sold but for a much lower price. That said, if someone does buy YouTube for anywhere near $1.5 billion this will light a fire under Web 2.0 like Netscape's IPO in the ninetees. Welcome back the sock puppet and the chimps.
--------
Webomatica
Dude. I seriously do not think that with the current exchange rate between the dollar and chicken shit means you seriously want to own $1.5bn worth of chicken shit. And even if you did, who would buy it, even if it was worth that much?
Mark parent "informative" .I just imagined 1.5 bill worth of chicken shit... and how it smells. - I do not want repeat the experience
The DMCA Safe Harbor clause will allow them to escape litigation as long as they remove the video as soon as they receive a takedown notice. Which they've been doing. To be honest, litigation isn't YouTube's problem. The poor video quality and the lack of people willing to pay for it is what's going to do them in.
My other car is first.
It's about to go down in price. Google Video is about to release a new, less ugly version and then there's http://soapbox.msn.com/ and Live Video Search.
The Internet Archive, which is a nonprofit, is also in the free video archiving business. Their main concern has been storage, of which they now have petabytes. Making the system friendly to the casual user has been a lower priority, and the Archive has a tiny staff. But you can get an Archive account and upload your video right now. If you have anything of historical significance, please do so.
The Archive has had some problems with bandwidth, but they just moved to a new data center, and that's improving. Last year, they obtained an archive of Greatful Dead recordings, which can be played out as streaming audio. The Deadheads, with their short-term memory loss problems, would play the same stuff over and over again. This was sucking up most of the outgoing bandwidth and interfering with video playback.
The Archive will probably be around long after YouTube is gone. Among other things, there's a duplicate of the Internet Archive in Egypt.
And at least one giant, Universal Music, are threatening to sue the company if their artists' songs keep appearing there.
Collective nouns are treated as plurals, even if their construction suggests singular or uncountable.
The collective noun isn't the subject of the verb, the word "giant" is. The main clause, which should be grammatically correct without the appositive, is "And at least one giant is threatening...".
Can you refer us to the documentation of their 'hellacious profit'? What was their profit last quarter?