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Google Buys YouTube for $1.65 Billion
Over 30 readers wrote about Google's purchase of YouTube today for $1.65 Billion, as rumored last week. The all-stock transaction is the single largest purchase in the company's 8-year history. The move follows on the heels of Google's convincing Sony and Warner Music to put music videos online for free. Reportedly, YouTube will retain its brand and all its 67 employees, including co-founders Chad Hurley and Steve Chen.
This is so ungoogle. Google builds, not buys. Google indexes, not serves. Google already had a video service.
Google is jumping the shark.
I keep seeing all these comments about "copyright violations" on youtube... is a 5 minute daily show clip a copyright violation? Is there such a thing as fair use? Does youtube (now google) have some sort of common carrier for video defense they could claim?
I'd like to see some serious commentary on this, and not just the assumption that youtube voilates copyright. I spend probably and hour a week watching stuff on youtube, and I'm sure over 95% of what I see does NOT violate any copyrights.
Is it because Google fumbled around trying to implement some sort of open-standards solution while YouTube built up a userbase with the corporate controlled but much more user friendly Flash format? (Egad, it even uses patented video codecs that Macromedia licensed!)
That's at least part of the answer.
Ouch Slashdot. $1.65 Billion. Ouch.
Blockquoth the AC:
That's one possible outcome. Another is that Google, already treading a very fine line with several of its existing offerings, has just taken a step too far and is about to be slapped down hard.
If I were a betting man, I would actually bet against Google on this one. Admittedly, that is partly because I don't like the way they've started taking liberties with others' work and assuming something is OK as long as they're the guys doing it. But mainly, it's objective analysis: Google have some good products, but they have little that's unique, and none of their big revenue generators has a great barrier to entry. They're currently target number one for several other big tech firms, and fighting on all fronts, and I'm sure Sun Tzu had something to say about the wisdom of that approach.
If you disagree, post your argument. (-1, Overrated) isn't your personal censorship tool for views you don't like.
What makes you think that the stock is evenly distributed among all the employees? Don't forget that the VC firm also has a big chunk of it (quite possibly the largest chunk). After that, the founders will have the lion's share.
Anyhow, they can't just sell the stock and run. They'll have to wait some specific amount of time before being able to sell.
None of which explains why Google thinks YouTube is worth $1.65 Billion. There are a lot of big profitable high-tech companies that aren't worth that much. Selling text ads? They don't need to buy the company to do that. Selling video ads? They have their own video technology.
Not that it matters. Google can spend its money its money the way it wants, because it has more than it knows what to do with, and because its stockholders are shut out of corporate decision making. So it can buy companies that have no hope of contributing to the bottom line (Picassa, Outride, lots of blogging and social networking providers). It can hire lots of talented people. (And not so talented. Some of the people who've gone there recently are better at self-hype than actually making stuff.) And it can do this without any concern about making money.
Why is this bad? Because you have a lot of money, resources, and talent being used to subsidize what amounts to high-tech masturbation. Google gets bigger and bigger, and yet they release very few new products. And the products they do release stay in beta mode forever.
And please, don't try to tell me that "beta" is just a marketing or legal gimmick. Products like gmail, Google Groups, and Google Maps have lots of cool features, sure. But they're unpolished, inconsistently implemented, and very poorly documented. But most of all, they lack the boring little features that separate a toy project from a a real product.
Financially, Google is big success. But when it comes to pushing technological progress, they're a ship without a rudder. A very fancy ship, mind you, with free gourmet meals for the crew, and lots of conveniences and gadgets. But where is ship going. Nobody seems to know.
Actually, with Google's deep pockets, there is NO chance that the awards will ever be paid out. You seem to have missed U.S. vs Microsoft: given sufficiently deep pockets, you can keep a case alive and churning through the legal morass of the court system indefinitely.
Prediction-the-first: this will be settled out-of-court, and along the lines of a statutory license.
Prediction-the-second: you will watch GoogleTV, and the copyright holders will love you for it.
Prediction-the-third: in the face of TiVo-enabled departures from a supportable advertising model, traditional TV broadcasting will end up losing out since Google will be able to provide exact viewer measurements and demographics and be able to target the most coveted consumer groups.
Liberty you never use is liberty you lose.