It was announced today this potential deal (see full story below). Although Youtube doesn't actually have any special technology advantage, it seems its 100 millions + videos views daily value $1.6 billion.
Is it a sign of bubble?
(CBS/AP) Internet search leader Google Inc. is in talks to acquire the popular online video site YouTube Inc. for about $1.6 billion, The Wall Street Journal reported Friday, citing a person familiar with the matter.
Mountain View-based Google and San Mateo-based YouTube are still at a sensitive stage in the discussion, the newspaper reported on its Web site.
The blog TechCrunch had reported on rumors of the acquisition talks. Google and YouTube officials declined comment.
Analysts said a Google acquisition of YouTube would make sense for both companies if the reported talks lead to a deal, especially considering Google's $10 billion in cash on hand.
"It's damn cheap for a company that already has a global presence," said Trip Chowdhry, an analyst with the San Francisco-based Global Equities Research. "YouTube's brand identity is no less than Google's and is no less than Coke's."
As YouTube's popularity continues to soar, she said, Google can help make sure the site's infrastructure can keep pace.
Before any deal between the companies can take place, Google will have to overcome a serious obstacle, CBS News technology analyst Larry Magid reports.
"One of the problems with YouTube is that they've been known to carry copyrighted material without the permission of the copyright holders. Clearly Google is going to have to deal with that issue," Magid says.
The acquisition would also immediately propel Google to the top of the online video heap. YouTube eclipsed traffic on Google's video site in February. By July, about 30.5 million people visited YouTube, compared with 9.3 million to Google Video and 5.3 million to Yahoo Inc.'s Yahoo Video, according to Nielsen/NetRatings.
"This is a pretty big investment even by Google's standards, but it could very well be worth it. YouTube is extremely popular and the beauty is they don't even have to pay for content — people put it up there for free," Magid says.
YouTube users watch more that 100 million videos daily.
Google's video service lets everyday users post clips, too, and unlike YouTube, Google also gives them the choice of selling video. All YouTube clips are free.
YouTube was founded in February 2005 by three former employees of eBay Inc.'s PayPal electronic-payment unit, and its chief financial backer is the Silicon Valley venture capital firm Sequoia Capital, which has invested $11.5 million. Sequoia was also an early Google investor.
The 25-employee YouTube is surging thanks to the increased availability of high-speed Internet connections and gadgets such as camera phones and digital cameras capable of taking video. Most of YouTube offerings are short amateur clips, although professional filmmakers, television networks and even political campaigns have posted materials.
When rumors circulated earlier this year that some major media companies were interested in buying YouTube, the company's chief executive, Chad Hurley, said the company was not for sale and a future initial public offering was possible.
Shares in Google rose $9.11, or 2.2 percent, to $420.92 in afternoon trading Friday on the Nasdaq Stock Market.
No comments:
Post a Comment