Update: The Wall Street Journal is now reporting this as well, saying “Google Inc. is in talks to acquire popular video-sharing site YouTube Inc. for roughly $1.6 billion, according to a person familiar with the matter. The discussions are still at a sensitive stage and could well break off, this person says.” More here.
I got an email tonight about a possible Google acquisition of YouTube that may be in the final stages before closing. Rumored price is $1.6 billion. A quick phone call to a VC confirmed that the rumor is circulating (he also confirmed the price), but that is far from confirmation that this deal is happening. I’m digging for more but the source on this one is very good.
We know that YouTube has had informal talks with a number of companies about acquisition in the $1.5 – $2 billion range. And I suspect Google won’t be daunted by the prospect of dealing with a ton of pissed off copyright holders.
Based on experience with these sort of rumors, I’d put this at 40% likely to be at least partially true.
Ludicrous. Why on earth does Goog want to acquire YT? It’d be slap in the face for Goog Vdo.
they both have cool logos.
Perhaps a slap in the face.. but what has proven to be the easiest and smartest way to get rid of competition in the past?
If you can’t beat them, buy them.
YouTube is on its own amazing.. Google video is not so bad either.. Combined forces of YouTube and Google will be devestating. Wasn’t there something going on with Yahoo doing big things with video’s online, too?
We know Google is going after video very seriously (they replaced Froogle with Video on their homepage.)
Youtube comes with a huge baggage of illegal content. Only reason they are not getting sued is because they have no money. I wonder how many hours will it be before Google is sued by copyright owners. If they do decide to take copyrighted materials offline, whats the use. I read reports saying around 95% of total downloads on Youtube are copyrighted material.
Maybe, Google will throw money at them to just shut them down.
Hey Mike,
Haven’t been getting much traffic lately? Or at least not as much as since you last pulled a stunt like this?
Please, let us know when it actually happens, because I don’t know about your sources or your reporting. As we’ve seen in the past, you have the ‘ability’ to go from 99% accurate to 95% inaccurate. What do others get? Disappointment. What do you get? 100,000 more people visiting your site.
Google is sitting on huge amounts of cash, their shareholders demand googler to continue their story. Also the Internet is a winnner take it all business, that by nature drives consoldation of the market – sometimes earlier then expected.
Maybe the don’t want another MySpace being acquired by some body else and having to make a lousy (for Google) ad deal with them just to make sure they don’t go to Yahoo or MSN.
Just an idea…how about a fantasy betting site for M&A (Mergers & Acquisitions) speculations
..in the lines Pickspal, Motley CAPS.. j/k
Jason – yep, these rumors usually turn out to be false. Sometimes the information is bad, sometimes the deals just don’t happen. But I keep the blog updated with the best information I have, and a lot of people have asked for me to keep doing these. If a rumor is circulating among Sand Hill Road VCs, many people would like to know about that.
1.6 Billion, what are they going to do v it? This is the early signs of BUBBLE 2.0
You know what would be interesting is if eBay bought YouTube since eBay already owns PayPal and the YouTube founders were former PayPal employees.
Imagine this if you will:
I want to sell a printer on eBay. If someone is interested in buying my product, they can call me via Skype and ask me to show them how the dazzling printer works via live video feed provided by a new YouTube application.
Even if this doesn’t happen, I don’t think this is a bad move for either group. YouTube is gonna get slammed to high hell with lawsuits as soon as they pull in a dime. Google can take that on and has the smart staff to police it better as well. Yahoo nabbed Flickr, this could be Google’s turn. Brings credibility to both of them.
Great news if it’s true.
Google + YouTube = Triumph of “Fair Use”.
Copyright lawyers please note: Chad Hurley and Steven Chen have been practicing their impression of Clint Eastwood’s famous line: “Go ahead, make my day!”
Quick, somebody film it and put it on YouTube.
To me it makes perfect sense – Google have been under-pressure to come-up with a winning product outside of their core search business and while Google Vid is a good product, it’s market penetration has been been less than significant.
The boys at YouTube on the other hand have seen their lead in the video stakes eroded by the aggressive moves being made at myspace and so would, I’m sure, be quite happy to get out while they’re still at the top.
I haven’t thought through the finer details, but the application of google’s extensive ad network and syndication capabilities to the traffic volumes at YouTube seems as likely as any to help YouTube to profitability. If this does prove to be true, expect YouTube to become even more ubiquitous than it already is.
Another interesting joust will be to then see whether the strategies of old media (news corp) and new tech (google) are better suited to monetising web 2.0
Let me take a stab at a possible theory/ random thought:
1) google buys youtube
2) youtube and google deploy video adwords ie- contextual/”vidtextual” ads postroll, monetizing the content.
3) google delivers youtube via Apple’s iTV, to get it to people on their tv.
also, lets say it is 1.6 billion. with youtube’s existing traffic x google’s ability to increase it, you’re saying Google can’t return its investment within the first few years? don’t look at the 1.6 billion for what youtube IS today, but what youtube WILL be once injected into Google. We were all calling news corp, idiots for buying myspace a year ago, now it’s a steal. Hats off to Google if they pull this off.
-Jason L. Baptiste
This would be completely opposite to just about every other deal google has done. Unless its a couple of million up front and a $1.58 Billion earnout.
YouTube is definitely a more intensely used product than Google Video. The data shows this. Google Video received a quick boost in traffic after they added the “Video” link to their homepage, but all other performance indicators are flat for them. More people visit YouTube, they come back to the site more often, and spend more time on the site each time they visit. Take a look at our YouTube vs Google Video analysis at (posted yesterday):
http://blog.com...ic-growth-2006/
Just imagine a service that tightly integrated all the great stuff being created and submitted on YouTube, with their Orkut social networking platform (popular abroad), with Dodgeball mobile features thrown in + targeted contextual adverts.
1.6 Billion dollar? huh?
YouTube cost more than 1.6 billion…
Google can buy YouTube, but YouTube do not give him
Anurag — incorrect. The only reason they are not getting sued is because they can only get sued if they fail to comply with DMCA. And they are not failing to comply with DMCA. They remove any content with the request of the copyright holder.
What they completely suck at is finding a way to actually make money off of the videos.
YouTube is NOT worth $1.5 billion. This is not a MySpace comparison. While MySpace was only making minimal profit, it was still pulling in legitimate ad revenue and no one doubted the potential. So what if it was hard to get money out of Gen Y on the spot — in the end they still spend money on beer, clothing, etc. The idea that Generation Y is hard to monetise is bullshit. The statement is totally flawed. They are the most vunerable to marketing out of anyone. On top of that there are so many other things that MySpace can do as it is a portal for Generation Y – the Yahoo! for this generation. Fox got MySpace at a steal and I never doubted them.
YouTube on the other hand is nothing. It is nothing new. They aren’t superstars and they aren’t worth $1.5 billion unless Google can find a way of compensating the copyright holder.
So if my song is used on a video that I don’t know then YouTube will NEED to find me. Get it? They will have to find me. Too much work. Imagine finding every single copyright holder of every copyrighted object on YouTube.
I am not responsible for contacting Google and asking for my cut of the package – they are.
So that won’t work. They can’t compensate individual copyright holders.
So they remove all illegal content in a bid to monetise it right? Logical step. And then everyone finally clicks – YouTube is nothing but online storage for illegal content. It isn’t anything fancy.
YouTube ain’t worth $1.5 billion. End of story.
The best thing YouTube has done is taught us a few valuable lessons about media and the demand from its consumers.
“I’d put this at 40% likely to be at least partially true.”
=5% chance
I don’t understand why google would bay worse product for that amount of cash. This is also strictly against what google has been doing in the past, buying new inventions and not competitors.
it can be true but I will stick to the 60 % true vs false. We know that Venice project (skype guys ) and eBay are preparing for something big. But certainly Google video and Youtube is active and hav already reached the Mass population.But a 1.5 billions…. !!
Google’s image needs to be steadily polished.
The only thing missing is that google buys out half of the Management of a western state like France or Germany and optimizes returns, offering German specialized engeineers half off in a coop with WalMarts and Microsofts 2nd hand ebay Engines and by the way outsourcing all minor-educated folks to Southpole, which in the end would only speed up the melting of the ice, splunging the world into the next world war, Germans will again be responsible for.
But naw, seriously.
Heellloo Google..it’snot just about looking clean and crisp. It’s about branding. Branding by structure, product and superior business intelligence, meaning always steps ahead. Simply having money shoved up one’s own and doing things bigger then any one else will not make a great company. It will build a large site with tons of traffic. But it will not be something revolutionary, which is the kind of action that turns dirt into diamonds.
To my mind, Google is wasting dollars and destroying market potential. Someone should research on that.
Sergey is very confident with his copyrights stuff policy. It won’t be a key issue in the deal making decision compared with the huge additinal inventory it can bring to the AdSense network.
Ex early Googler.
digga pls lol
Why would they buy You Tube when they could instead improve Google video?
What makes people upload to YouTube instead of Google video? Is it easier? faster? better conversion? handles more formats? What ever it is I’m sure the clever people at Google could make Google Video do the same.
Personally, I prefer watching You tube videos because they stream better than other video sites. With Google video, the videos rarely download fast enough to start watching straight away. It might be because the compression is so high on you tube, but I would rather watch bad quality than not be able to start watching instantly.
the primary reason WHY youtube has so much traffic is because of all the copyrighted material on it – like all those music videos.
without that, youtube just wouldnt have the traffic.
(and it would be a great shame to see it go – i love watching all those 80s music videos)
mmmmmmmmmmmmmmmm wht about i los in comment
jameel_lovestory@hotmail.com
YouTube.com: At $1.6B, and 23.7 million users (according to blog.compete.com) = $67.51/unique user
Facebook.com: weren’t they valued at over $100/user by Yahoo?
let see and hope wht ever happens makes youtube a better place
let see thing getting better or not at the end …
Mike,
Personally, I really enjoy the rumors, and I would definitely not like it if you (or anyone else I read) starting blogging for money ala PayPerPost.
A lot of people would be aghast if a respected reporter/journalist/blogger/etc published something entitled “completely unsubstantiated rumor”. Just as you were vis-a-vis PayPerPost.
Just food for thought…people have different “ethics” and “standards” when it comes to reporting/journalism/blogging/etc.
Keep up the great work.
Personally I hope this goes ahead
no successful blogger would sacrifice their credibilty with pay per post.
40% of the time, it works every time.
Doesn’t this make sense from YouTube’s perspective? What’s their main cost? bandwidth. Who seems to have more bandwidth than you can shake a trillion searches a second at? Google. Plus, they get bought by one of the most respected companies on the Internet…
If this materalizes then MySpaces is probably valued at at least $3b now…..Newscorp scored big on that one.
“Facebook.com: weren’t they valued at over $100/user by Yahoo?”
The average Facebook user has an account and is probably somewhat active on the site.
The average YouTube user might never actually visit youtube.com
“no successful blogger would sacrifice their credibilty with pay per post.”
Agreed.
Hat’s off? Not likely.
Consider these points:
1. YouTube hasn’t found a way to monetize its site. Sure videoads might be interesting, but there’s a reason why we switch from regular TV show to internet, cables, and TiVo.
2. Clustered server technology that Google has might be a good addition to solve YouTube’s bandwith problem. But still, this won’t be plausible for business. Why would you add burden to your network use for something that is yet to score profit.
CNBC just cited this post as something that was likely to impact Google’s stock today.
I bet 5$ on Viacom together with NBC, News Corp., AOL or any other NYC Midtwon media player. They already own a lot of Youtube’s content and they could monetize their entire movie database in a second. Why the hell would Mercedes buy Porsche? It just doesn’t make sense to me.
With a few changes in the Google Video system and 1,6 billion in advertising Google could clone and beat Youtube’s success story.
CNBC all over it. Cautioning that the news comes from a blog. Sis.
well, we do know that Chad Hurley was down at Google on Wed and Thurs chit chatting with lots of media execs, including CBS execs.
http://www.tvwe...ms?newsId=10850
Is goog the next ms. You know, the ones that kill innovation? Maybe, people are smarter today. Although lately, we’ve been setting up more social networks (all types) for dif groups.
Well well well; if google buys youtube, will youtube.com redirect to google video or will it stay the same?
I think its worth more than that.. What google does is somewhat exactly youtube does to video. If they buy it for anything less than 3 billion dollars its a steal. if skype get 2.4 billion why not youtube..
Dont tell me this is going to happen..
CNBC reported this rumor a few minutes ago, mentioning Techcrunch as the source.
Could Google re-create the scale of YouTube with even one-half Billion in advertising/PR? Err…Probably. Not to mention Google could likely operate a service the size of YouTube at a considerably lower cost of BW, and doubt they are buying the content or the brand. (google’s YouTube?, nah)
The only reason to do this sort of deal would be to take them off the table.
I say let Google buy YouTube – that would be internet company aquiring internet startup company = a more powerful internet and leverage over the old guard/old business ways of doing things.
Rex