After being in a “bidding battle” between Google and Yahoo, Google finally acquired YouTube for a whopping $1.65 billion in stock earlier today. YouTube, a user fed social video networking site, recently surpassed MySpace becoming one of the most viewed and visited sites on the internet. The acquisition of this 19-month-old company marks, by far, the largest acquisition made by Google to date. Most had expected this transaction to be unlikely since Google already offers “Google Video” a
current former YouTube competitor, but it will now be more interesting to see what happens. gooTube? gTube? Lets hope not.
“The YouTube team has built an exciting and powerful media platform that complements Google’s mission to organize the world’s information and make it universally accessible and useful,” Eric Schmidt, Google CEO. “… Together, we are natural partners to offer a compelling media entertainment service to users …”
The Big Question: What’s in it for Google?
Google plans to start to spread their Adsense advertising throughout YouTube for profit, but most importantly Google wants to gain access into the social networking market. We still do not know Google plans to keep the two services separate or merge them into a “Tube” in the future, however, according to Google, YouTube will remain and operate independently with their 65 employees for the time being.
In my opinion, the deal may not be all that good for YouTube users or Google. More advertising may draw the current audience away from YouTube to finding other services, similar to what is happening with MySpace. The deal will also keep Google’s lawyers busy because of the large amount of copyright violations, notices, and lawsuits YouTube receives everyday. A recent research analysis found that over 60% of the content on the “most viewed” page was illegally uploaded. Either way YouTube is continuing to expand and they even struck deals with both CBS and Sony BGM last week to offer both TV shows and music videos for free.