Moments ago the deal was confirmed. In their largest acquisition to date, Google has acquired YouTube for $1.65 billion in an all stock transaction. Both companies have approved the deal, which should officially close in the fourth quarter. YouTube’s 65 employees will remain with the company at YouTube’s San Bruno headquarters.
Details are also emerging that Yahoo was in the bidding war until very close to the end.
Google is hosting a conference call and webcast to discuss the deal. My notes are below, and a recording of the call is here. You can also hear a replay of the call via telephone until midnight Monday, October 16 at 888-203-1112 domestically and 719-457-0820 internationally. Confirmation code for the replay is 2260624.
This went from rumor to reality incredibly fast.
My Notes from the call:
Eric Schmidt, Google’s CEO, Chad Hurley, YouTube’s CEO, David Drummond, Google’s General Counsel and others are on the call.
Eric is starting the call and immediately started talking about the content deals announced today. He says Chad Hurley and Steven Chen, YouTube’s founders, remind him of Larry and Sergey.
Chad is now talking about the reasons he agreed to be acquired by Google. He says Google’s ad platform will integrate perfectly into YouTube. Says the cultures are very similar.
Steven Chen is now talking, saying that Google’s platform combined with YouTube’s “innovative technology” is a perfect match.
Sergey say “Google’s mission is to organize the worlds information…and video is an important part of the worlds information”. Says Google’s core strength is search and advertising.
Questions just started. I’ve put myself in the queue to ask about the Fox/Myspace angle.
Mary Meeker at Morgan Stanley is first. Asking about YouTube content and how it will be integrated into Google. And how content will be monetized.
JP Morgan is asking about why all stock, and why buy YouTube when Google has its own video site. David Drummond says its a stock deal to make it tax free to YouTube shareholders. Eric says that YouTube was in a unique position and had a unique product offering that Google admired.
Question about YouTube’s new technology to auto-recognize copyrighted content.
Question about “pre-roll ads”. No real answer here. Saying they will look at all options.
Question about revenue shares given to content providers and how the company was valued. Not anwered – “we do not go into details on financial deals”. Eric is saying that deals are very good for partners. David Drummond says they arrived at a purchase price that is “very fair”.
Lots of questions on copyright issues.
ABC News question on integration between Google and YouTube. Steven Chen says they are working on a list of potential integration points, will take weeks to sort out. Sergey is saying that integration with search is going to be important, and that they will be experimenting. Eric is saying that Google Video is not going away.
Question about the bidding war for YouTube. No answer.
Great question about Chad’s statement this summer that YouTube plans to remain independent. Chad says that they will stay independent under this deal, so best of both worlds. No real way to answer this question.
That’s it. As usual with these type of calls, I wasn’t able to ask a question. 
Congratulations to YouTube on this deal. I remember when I first wrote about YouTube in August of 2005 (I wrote that post from a Starbucks while on a road trip), and meeting Chad Hurley at the very first TechCrunch party.
I knew I should have put my bid in today.
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I love YouTube and my iPod, so do you know how to download youtube videos to iPod?
Suggest you a nice YouTube to iPod tool: Video Download Studio
Just after the bell!
Congrats to the youtube guys. Should be a nice chunk of change for them, I’d imagine
Ya change if your wondering why all the music videos and music have been dissapearing off youtube that google…bastards
Lucky them. I wish I could something for 1million atleast lol.
poor yahoo
sell something*. Anyway, kudos to Micheal!
i wonder how much of a discount google would have gotten if they had waited a few more months. if reports were accurate that youtube spent $1M a month on bandwidth costs, then time may have been in google’s favor.
High bandwidth costs, increasing pressure to curtail copyrighted videos…google might have had some leverage over a desperate youtube months later.
how is youtube different from napster? and look what has happened to napster and other copycats once the music industry got their footing.
it’ll be interesting to see how the media giants react now that youtube has the deep pockets of google. Lawsuits 2.0?
Congrats to you Mike for breaking this story – even nailed the price! A small step for a blogger, giant leap for bloggerkind, or something.
yes, jsut after the bell !! : whover said tat ..
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Way to Go, miky .. you put your head on the block for this scoop !!
Mike, you and your “source” indeed rock
Kudos for getting the news out first and congrats to the YT team.
Congratulations to Yahoo on a job well done. Today is when Google jumped the shark.
I don’t think they could have waited to try and get any more of a discount. Yahoo is in a tough place with a ton of pressure given recent performance. I’m sure they would have prefered to have Youtube and would have moved quickly to get it. I think they also would have overpaid for it to let the street now they are serious about video. My guess is they will now go harder after Facebook which could end up being a mistake.
Boy, I am glad I was wrong and you were right Michael. This is awesome news!!
Google + YouTube = GooUbe [;)]!!
Congrats Google!! and YouTube Team!!!
Cheers,
Dreamchaser
http://dreamchaser.go4i.net/
I’d like to dedicate a moment to list all of the people on Mike’s case for breaking this story …
ah, well they know who they are.
Great job Mike!
Congratulations, Mike. You’ve made a piece of history!
Wow did you guys feel that, an earthquake took place after this announcement.
The money involved in this deal is dizzying. The new posterboy of the succesful post-dotcom era businesses.
This is a steal for Google at 1.65 billion!
Way to take a chance on the acquisition prediction, Mike. I definetely had my doubts especially after reading your 40% prediction. Good work ladies and gentlemen… Now let’s see a Facebook acquisition! C’mon Yahoo!, get on the ball before Google buys that too.
Google can afford $1.6 Billion . It is not as if they are buying on credit .
Ehéh. Les cons..
What exactly is an all-stock transaction? How does this work out? Do all of YouTube’s employees get actual money or what?
ZOMFG – GooTube here we come ;0
Comparing Facebook to YouTube is the most ridiculous statement of the decade.
Hey Mike and all,
I’ve posted my notes from the conference call (which just ended).
http://youmakem...e-buys-youtube/
Perhaps someone can help get the correct names to my quotes?
^Response to Vik. In terms of dollar amounts it is not the most ridiculous statement of the decade. They’re both valuated in the over $1B and less than $2B.
It’ll be interesting to see how Google handles potential copyright issues from the purchase of YouTube.
From $0 to $1.65B in one year. Call Guinness…
Facebook is worthless.
Youtube is priceless.
Seriously. Anyone with a brain can see that.
Amazing prediction – Call of the year! – And that guy who is in on the first (3) comments when you first said this …. ya know the guy who said ..
– ” Is this web 2.0 or are you trying to get 100,000 visitors to your site?”
This guy is a chump, Now he is eating his own words- what a chump.
One can be thought wise even though a fool if he just keeps his mouth shut!
Great reporting, Richard Bowles
Google+YouTube=BCST
Same enterprise culture at the 2? For me Hurley and Chen are in the middle in the spectrum, while Page-Brin are on the tech savvy geek corner, and Anderson-DeWolfe form the social-networking-hub margin. Not really the same tech- and company culture, just the half.
If Google would buy Genentech for instance, that would be really cool.
Merging IT with BT, that is the future.
I hope all those who were bitching and accusing Mike about his ‘rumor’ can eat their words and shut up next time (just saw a comment ver similiar). It’s his blog, let him report or blog about what he wants. If you don’t like it, don’t read. Its rediculous. Also is bitching about advertising… again it is his blog. There was this one idiot at the Future Of Web Apps summit who every time he got the chance asked about ads how crappy they were and how they steal the ‘user’s space’. I wanted to punch that guy.
Attila..that doesnt even make sense. Although interesting, a Gene/Google pairing would be a complete disaster. 2 very different cultures and approaches to product development and risk-taking..
youtube culdn’t have landed in safer hands…if google play their cards right they could use youtube as a moneymaker and finally receive a profit this quarter!!!
What will we see as users? No change to YouTube I imagine, but perhaps a knowledge that whatever the bandwidth bill, it is not going to fold.
Unbelievable. I strongly believe that a talented UI group could have taken Google Video and re-worked it into strong competition for YouTube without the 1.65 BILLION dollar expenditure.
Well, Google will takeover the world :\. Or not
.
One helluva scoop! I think the whole world was checkng TechCrunch for details. Great work.
Ben, who cares about a UI if there aren’t any users there to use it.
Great work on scooping this one guys.
MUST BE NICE TO SELL COPYRIGHTED CONTENT AS YOUR OWN! NOW GIVE US BACK NAPSTER O’WELL I’LL JUST STICK WITH EASYNEWS.
Has anyone done the math and figured out how long it will take google to earn back their equity selling ads on youtube?
Just to put it in perspective, if youtube earns (net profit) $1 million a day, it would take more than 4 years for google to earn back what they gave up in equity. Its possible if google can really monetize youtube’s daily video streams and pageviews. No doubt an agressive price given that youtube’s rate of growth has well peaked. Also amazed it looks to be an upfront deal, no earnouts etc. (that I’ve heard about) . . . google’s making bold moves.
I wonder what will happen to these guys
http://www.rev2...del-to-youtube/
All the gossips are closed now..
the way to go Google.
an analysis to all ups and downs of this deal:
http://googlelogs.blogspot.com
Vik’s Rumor Mill: AOL to purchase Digg.com.
This isn’t the only news to come out today from Google… As covered on my blog, Google just announced a deal with both SONY BMG and WARNER MUSIC to offer the companies’ “expansive music video collection[s] available for online streaming at no cost to users!”
To recap:
ALL MOVIES FROM SONY BMG WILL BE STREAMED VIA GOOGLE VIDEO (AND GOOGLE ADSENSE PARTNERS, *cough*cough* YOUTUBE)
WARNER MUSIC WILL ALLOW MUSIC VIDEOS, ARTIST INTERVIEWS, ETC. TO BE STREAMED FREE VIA GOOGLE VIDEO (W/ ADS) OR PURCHASED THROUGH GOOGLE FOR $1.99/video
-Kyle
Michael, don´t be humble ! You have gave the news first… Congratulations !!!
Mark Cuban was right. Google is never going to make back $1.6B in any reasonable amount of time. And no earn-out? Eric’s gone soft.
The only way Google will profit from this is by shutting down YouTube and funel the traffic to Google Video.
Repeat after me… broadcast.com