Today, the media has been ablaze with the news that Google has just purchased YouTube for 1.67B US dollars; a profitless 1 year old company spawned by Sequoia Capital. A media event like this has not happened since Ebay bought Skype.
In both cases, the question was WHY? Speculation abounds now, just as it did then, as to just exactly what the acquiree will do with the acquired company.
The SF Chronicle said it best, "....San Bruno-based YouTube has helped transform the Web, spurring millions of people to tune in to watch popular television shows, music videos, teenage confessionals, grainy footage of stunts and pranks, and home videos of children and pets. On any given day, YouTube plays more than 100 million clips, drawing a greater viewership than many cable television channels. "
In retrospect, Ebay's purchase of Skype made perfect sense - Ebay now has a tool to connect buyer and seller in real time, plus another stream of revenue with Skype out and Skype voicemail. The once loud voices of the naysayers have quieted.
Likewise, there is no end to the creative uses that Google can put YouTube technology to in the quest for market dominance.
Recent acquisitions show that Google has a strong interest in blogging as the next new phenomenon on the web - doesn't it make sense that the next evolution of blogging will be video-based blogging? Now that web cameras are as inexpensive as a car wash, videos are easy to create and upload.
Google searches were on the forefront when image based search was announced. The market needs always seem to leapfrog demand, and both blog and video searches will be the next big wave. I am sure that the talented staff at Google will make good use of YouTube's technology to enhance video searches, as well as create video based Adwords and Adsense campaigns that will create even more revenue.
The major challenge that Google will face lies in the foreshadowing of legal action surrounding video copyright issues.
No, I don't believe YouTube will become the next Napster, as it now has the full legal resources of Google behind its efforts. In time, the naysayers will again find that they lack vision.
Google stock went up today, as well it should!
Recent Comments