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Why Google Wanted a YouTube Lawsuit
An anonymous reader writes "After YouTube was purchased for $1.6 Billion, there was rampant speculation that Google would soon be waist-deep in billion dollar lawsuits. Despite the enormous liability issues, Google purchased YouTube for a mind-numbing sum, leaving many doubters wondering if Google considered all of costs involved. A theory has been put forth explaining what Google may have been thinking when it bought the company." From the article "Letting YouTube fight this battle alone with their own lawyers might have resulted in a very public and unnecessary loss that would have crippled Google's video ambitions and possibly caused collateral damage to a bunch of related industries (especially search)." In short, the author argues that Google had a lot more to lose had it kept away from YouTube and let the old-media companies crush it with lawsuits."
The sad thing about this is that it actually does make sense that Google should buy Youtube for the reason stated in the OP.
It is really sad how the interpretation has become a matter of who can afford the most lawyers and things like that. I think this is a trend that is seen at it's strongest in the USA but we sure also see this here in Europe and Denmark where I live.
In my simple mind the law should be equal for everyone no matter how much money they have, but that really is being naive these days as far as I can figure.
I don't know if my thinking here is to much influenced by movies like Civil Action, but then again it claims to be based on a true story (and the movie is almost 10 years old, so I guess this isn't a new trend, at least in the US).
I tried Googling for their reasons, but results aren't conclusive.
By this interpretation, Google could have waited for the lawsuits to start and then buy YouTube for very little money, they could have saved a Billion.
When his defense asked, "Which computer has Jon Johansen trespassed upon?" the answer was: "His own."
Google could have filed amicus briefings on behalf of the defendant (they did so a couple years ago when yahoo was being sued).
But the proposition is backwards. youtube had no money or revenue. Google has both. That's a big red "sue me" sign stapled on their back.
I'm seriously hoping that things remain open, as far as video sharing goes. But, I feel that if Google makes all sorts of deals with the media companies, we're likely to still end up with restrictions on how/what we share.
Thats why they have Amicus curiae briefs. If Google just wanted to help YouTube defend themselves, they could have filed such a brief for much less than the 1.6 billion (or whatever it was) they spent on YouTube. Or if they really wanted to take an active role in the lawsuit, they could have waited for it to be filed and then bail out YouTube for much less money. Though its questionable whether or not they would have ever been sued in the first place had YouTube not been bought by someone who could pay up.
No matter how you cut it, this would have been a silly strategy. Can we please stop pretending we are on Google's board of directors and posting all this speculative BS on what we think they are doing or will do in the future? Please?
Mathematics is made of 50 percent formulas, 50 percent proofs, and 50 percent imagination.
If that were the case, google could just donate money to youtube to pay for their legal defence, and not get involved with actually owning the company. It would cost an insignificant amount relative to the $1.6B purchase fee, and they wouldn't have to pay damages in the event of defeat.
Thats why they paid over the odds for a company begging to be sued so they could turn it into a target too rich to resist.
Its far more likely Google wanted to be a dominant player in a market other than search so badly they forked out the $1.6 billion knowing a lawsuit would likely follow if they could not negotiate a quick settlement and apparently in the process overvalued not just youtube but also the amount of clout they hold with the content providers.
Do not try to read the dupe, thats impossible. Instead, only try to realize the truth
What truth?
There is no dupe
I'd bet money that Google bought YouTube to get face time/leverage with television/movie execs. Google has failed miserably to get the entertainment folks on board. I think they made an expensive gamble that they could leverage YouTube to get the studios on board and they lost.
If a company issues stock for a purchase, it dilutes the existing stock base, so it isn't like they're creating value out of thin air. if 100 shares exist, and the company's worth $100K, the shares are worth 1K each. If they print another 100 shares, all 200 are worth $500 each. Usually, stock used for purchase is already "printed" but part of the reserves of the company, so it doesn't devalue the shares, but that actual value of ownership (just as if it had been bought at market with cash) transfers to the designee.
it's EXACTLY like they paid cash, and then they took the cash and bought stock at market with it. It certainly isn't "printing money" like you implied. If you think the company will go up, it's better than cash. Since the market's open to sell the stock, they can dump it for cash and get full value for it.
Simple econ. Stop trying to make a normal business transaction sound like something nefarious...