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YouTube's Plans for a Google-Owned Future

Posted by ryuzaki0 on from the here's-hoping-for-the-deal dept.

eldavojohn writes "Reuters is reporting on Time Warner's approach to YouTube's copyright problems. There has been much speculation that Google will be sued immediately over copyrighted material on YouTube but this is a case of Time Warner actually approaching Google to work out a deal on this issue. It appears artists and labels will have the choice when digging into Google's pockets either through a business deal or lawsuit. Which will they pick?" Meanwhile, the AP is reporting on the possible development of a technology to automatically screen content as it is posted to YouTube, which may sidestep some of these issues and disappoint users.

19 of 102 comments (clear)

  1. Hot air buys more hot air by Rosco+P.+Coltrane · · Score: 3, Interesting

    Quite frankly, I still fail to see how Google can have such a huge market cap. But I'll admit I'm not much of a business guy, perhaps their revenue streams from advertising, selling search services of various kinds and other services are enough to justify it, but still, Google is and has always looked like a huge Enron-type sort of operation.

    But Youtube? these guys, I just have no idea how it can be worth anything at all. I have a feeling the Google emperor truly has no clothes at all...

    --
    "A door is what a dog is perpetually on the wrong side of" - Ogden Nash
    1. Re:Hot air buys more hot air by brunes69 · · Score: 4, Insightful

      Their revenue last year was 6.1 billion dollars. That makes their market cap only about 20x revenue, which is a very resonable number in any book, and simmilar to MSFT and eBay and most other large companies

      As for YouTube - while it was private at the itme of sale, it *was* selling ads, and lots of people close to the inside said it was actually turning a profit. This is a rarety for a web start-up nowadays.

      POersonally, I thin kif anyone can monetize YouTube quickley, it';s Google. They already have partnerships with Viacom and MTV to sell content via Google Video, so moving those deals over to their YouTube site should be a walk in the park. Combine pay-for content with Google's ability to place relevant ads by the video, and they have a win-win.

    2. Re:Hot air buys more hot air by gregorio · · Score: 4, Informative
      Their revenue last year was 6.1 billion dollars. That makes their market cap only about 20x revenue, which is a very resonable number in any book, and simmilar to MSFT and eBay and most other large companies
      What matters is their P/E: Google has a ~62 P/E while Microsoft has a ~24 P/E. Income does not matter, it's the earnings that do matter.

      Still, if you look only at the earnings, you'll have a ~21 ratio for Google and a ~6.5 ratio for Microsoft. A huge difference.
    3. Re:Hot air buys more hot air by UnknowingFool · · Score: 2, Informative
      But I'll admit I'm not much of a business guy, perhaps their revenue streams from advertising, selling search services of various kinds and other services are enough to justify it, but still, Google is and has always looked like a huge Enron-type sort of operation.

      After Enron and Worldcom and the like, people are skeptical. But Google's profits are as real as Microsoft and Apple. YouTube is a little harder to grasp since they are newer and private. However Google isn't interested in their profits but their potential. Remember Google didn't pay cash for YouTube. They paid with stock. So it didn't really affect their operating income.

      --
      Well, there's spam egg sausage and spam, that's not got much spam in it.
    4. Re:Hot air buys more hot air by maxume · · Score: 2, Insightful

      Of course, you can then look at the PEG ratio, which tries to give more importance to future earnings. Currently, the PEG ratio is 1.43 for Google and 1.5 for Microsoft.

      http://finance.yahoo.com/q/ks?s=GOOG
      http://finance.yahoo.com/q/ks?s=MSFT

      Since price is a good indicator of how the market feels, my read is that the PEG gives you a way of looking at how the market feels about reward, and P/E gives you a look at the risk. So you take on a whole lot less risk with Microsoft, but sacrifice some upside.

      --
      Nerd rage is the funniest rage.
  2. I don't get it. by delirium+of+disorder · · Score: 2, Insightful

    Why is everyone speculating about "what will happen when google gets into the online video market"? Google has already been providing a flash based user submitted video service through google video. Why does adding youtube to the google empire change anything? Lawsuits are not a problem with google video; what is youtube providing that makes it more open to litigation? Moreover, IMHO google video is a much better service than youtube. Youtube appears to be flooded with stupid homemade clips, while google video has terabytes worth of both excellent amateur footage and quality feature length professional video, (along with a lots of crap but still less than on youtube).

    --
    ------ Take away the right to say fuck and you take away the right to say fuck the government.
  3. I think it is interesting... by rollonet · · Score: 2, Interesting

    The whole Google buying YouTube thing interests me quite a bit, especially the $1.9billon investment for a company which appears to be a giant liability. Also, next to Youtube, Google Video is the second biggest player in the online video delivery business. It seems there's no sense in spending over a billion for a product like this unless they feel threatened. Also, upon visiting YouTube (and I do quite a bit) I often do so to check out a video clip or a bootleg of a concert. I believe that now a company with a large amount of cash has purchased YouTube, it won't suprise me if the recording industries take a more hostile approach to YouTube - instead of the 'peaceful coexistance' style policy that's been adopted while YouTube did not have much money. In the end, a hostile, lawyer friendly approach to YouTube would be kinda sad, as many of the video clips and bootlegs I have heard/seen on YouTube have inspired me to purchase the music legitimately.

  4. Is this a good or a bad thing? by Turn-X+Alphonse · · Score: 2, Interesting

    I can't decide if this is good or bad.. on the one hand this means youtube can still use all the crap it does already without the worry of legal threats... but on the other end of the scale does it also set up a president of "we licenced youtube to use the music, you can not access youtube for X dollars a month and watch the music of your choice" and hence making a two tier youtube system..

    --
    I like muppets.
  5. what? Google had its own video too? Really? by krell · · Score: 4, Insightful

    "Google has already been providing a flash based user submitted video service through google video. Why does adding youtube to the google empire change anything?"

    Google has online video just as Lycos.com has web based email. It really doesn't matter. Youtube is "it", the one with critical mass, the one everyone goes to first. Youtube is to online video what eBay is to online auctions.

    --
    Where were you when the voynix came?
  6. Are they going to change the available formats? by also-rr · · Score: 3, Insightful

    One of the good things about youtube is that they have stuck with Flash 7, so at least Linux users *can* watch the videos. Still, it would be nice to see an open format option - and Google Video does offer some other formats.

    At least if they move to Flash 9 it works on Linux by either running IE6 or Firefox under WINE until the Linux flash 9 release but it's not the slickest way of doing it.

    --
    Think of the Children; Sleep with your Sister
    1. Re:Are they going to change the available formats? by vhogemann · · Score: 2, Insightful

      You just gave me this idea... What if Google start using an open format, say OGG Theora, for better quality content? They could provide a player, as they already do for their flash format, or a plugin.

      Then, they can just create an WebAppliance to store, catalog and stream video. And sell this to big media providers as a more reliable, cheaper alternative to WMA(spit!) and REAL(spit!). One that will be automagically compatible with Windows, Mac, Linux and every other platform out there, since it's based on a open format.

      Can it be? Can Google put an end on the dominance of closed formats on the web?

      --
      ---- You know how some doctors have the Messiah complex - they need to save the world? You've got the "Rubik's" complex
  7. I'll believe it when I see it by aussie_a · · Score: 3, Informative

    It appears artists.... will have the choice when digging into Google's pockets either through a business deal or lawsuit. Which will they pick?

    The first time an individual sues Google over YouTube content or makes a business deal for YouTube content, I want someone to e-mail me. My e-mail is John@TheLysts.com (yeah bots, pick my e-mail up. It's all over the place. I use Gmail so you're no problem for me). I say this because I doubt very much any individual content creator will be able to broker a deal with Google without going through a proxy. The fact the slashdot summary says artists will have a choice is just ridiculous. Artists have a choice of what company they sell their rights to. They don't have a choice about sueing Google or making deals with Google (except for future ones who can factor that in when selecting what company to go with).

  8. first google troll of the day by rs232 · · Score: 2, Insightful

    "Quite frankly, I still fail to see how Google can have such a huge market cap .. Google is and has always looked like a huge Enron-type sort of operation"

    By any chance are you typing that BS out of Redmond? Google generated 2.25 billion in the first quarter to March 31, 2006. Google doesn't perform bugus trades between a number of fake companies. It has never been accused or been in court for such thing. To suggest it here suggests to me that you are a trolling.

    was Re:Hot air buys more hot air

    --
    davecb5620@gmail.com
  9. agreements with major music labels by rs232 · · Score: 2, Interesting

    "YouTube .. a company which appears to be a giant liability .. it won't suprise me if the recording industries take a more hostile approach to YouTube"

    Just hours before Google announced a $1.6 billion acquisition of YouTube on Monday, both companies separately revealed agreements with major music labels for offering music videos on their respective sites.

    was Re:I think it is interesting...

    --
    davecb5620@gmail.com
  10. Napster 2.0? by starseeker · · Score: 2, Insightful

    I fear Google is going to step into a hornet's nest here, sooner or later.

    YouTube has the same problem Napster used to have, back when it was wildly successful - its success rests on a lot of material being present on the site, but a lot of that material has copyright problems. (A guess would be that a lot of the higher quality material has copyright problems, for a few reasonable definitions of "higher quality".)

    I think any online site of this nature is going to have the same problem. The availability of vast amounts of copyrighted material is one of the things that will build the popularity of this type of site. But if the copyright holders didn't release that video then it will just make trouble in the end.

    I don't think people are really all that interested in 1000 videos of people in their living rooms trying to act. TV shows, music videos, natural disaster footage, and all the usual stuff that gets put on TV will be what draws people to any online video site (why do you think it got put on TV in the first place?) Google is making a few deals with some of the big players, who perhaps have realized that it is better to try and cope with this in its current form than have it move somewhere more underground, but there are undoubtedly thousands of copyright holders who would have a case and not all of them will agree. A massive scrubbing will have to take place, and I think once it is over YouTube will be about as interesting to people as Napster was after the lawsuit dust settled. It might do slightly better since there are a few types of home video that people find interesting (uploaded individual videos from major world events, for example) and a few companies are making deals to provide content but I think the "buzz" will fade. The very elements of Napster that made it popular were also what made it illegal, and I'm afraid the same thing will happen here.

    --
    "I object to doing things that computers can do." -- Olin Shivers, lispers.org
  11. The record companies just don't get it! by Pollux · · Score: 3, Insightful

    It appears artists and labels will have the choice when digging into Google's pockets either through a business deal or lawsuit. Which will they pick?"

    If I was a musical artist, and I discovered one of my songs in a YouTube video that had a million views, I would write a letter of personal thanks to YouTube for promoting my song! Where else am I going to get that widespread promotion without hiring a record company to help negotiate with Big Radio? And besides, even with a really good hit record, record companies have to pay to play and promote almost anything now days. But YouTube is completely free. You can't get a better deal than that.

    But unfortunately, record companies have always been like hawks seeking their prey, and a million song views in their eyes is like a million field mice all waiting to be swooped down on. A million views means a lot of royalty money that could be earned if royalty deals were in place. They control music distribution via radio, TV, movies...but darn that blasted internet.

  12. Foot in the door by Rupy · · Score: 2, Interesting

    To be honest the purchase has baffeled me as well. $1,65bn just doesnt seem worth it - really. I have three (somewhat conjoined) theories: 1) An attempt to get their foot in the door with social networking, (to eventually tackle myspace?) and establish total "Internet Dominance" (tm) 2) Google has tossing money and throwing their weight around around to create buzz and increase stock... 3) Plans to take over the growing (legal) internet media distribution market. Perhaps partner with the likes of Paramount and co? RFC...

  13. The real rason why Google bought YouTube... by pr0digy25 · · Score: 2, Interesting

    I am not a financial analyst or anything of that sort, but it has me wondering if Google bought YouTube for such a high value so as to justify their own market cap and keep it up there. Like real estate, the sale of adjacent home for a high value only serves to reinforce and increase the market value of a dormannt propety. Maybe Google sees another DotCom bust coming and is trying to change the tide.

  14. Who Chooses... by nick_davison · · Score: 2, Interesting

    It appears artists and labels will have the choice when digging into Google's pockets either through a business deal or lawsuit.

    Generally, in business, it depends on who's doing the choosing.

    Sadly, any CEO in a publically traded company knows they have to trade for the fast buck, not the long term one (despite their constant assurances to anyone listening that that's exactly the opposite of what they're doing).

    Why? Because shareholders generally aren't in it for the long term. They want a buttload of money to come in today, that'll temporarily massively jack up the share price, and then let them get out (or at least reap the dividends). The way the system works, they don't (and arguably shouldn't) care about long term earnings anywhere near as much as the short term ones. As a result, the CEO knows he'll be replaced if he's ever foolish enough to choose long term profits over payouts for investors today.

    It's for exactly this reason that the Google guys refused to sell a controlling interest in Google and awarded their own stock 10 times the voting rights of everyone else's - it allows them to make the right decisions for the company rather than the right decisions for the guys who want to take a profit and then move their money to take a profit from the next company.

    Long term, successfully killing music videos on YouTube is a horrible idea. The people there today get rich from the infringement lawsuit, the next generation of artists get no ongoing royalties. A much better solution would be to take 20% of the money you could get from a lawsuit every year and keep getting it long past 5 years' time.

    So, if artists vote, they'd take the long term rewards. If TimeWarner's CEO votes, he has no choice but to take the massive payout today or get replaced by his shareholders. If TimeWarner execs vote, they have to do the same or deal with a seriously pissed CEO. If the RIAA votes... Who knows. They're supposed to represent the artists, they really represent the companies and they're mostly interested in the souls of babies.

    I don't dispute a long term royalty structure is vastly more profitable. But long term profits aren't necessarily what motivate modern business.