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Google Buys YouTube for $1.65 Billion 424

Posted by kdawson from the let-the-gootube-jokes-begin dept.
Over 30 readers wrote about Google's purchase of YouTube today for $1.65 Billion, as rumored last week. The all-stock transaction is the single largest purchase in the company's 8-year history. The move follows on the heels of Google's convincing Sony and Warner Music to put music videos online for free. Reportedly, YouTube will retain its brand and all its 67 employees, including co-founders Chad Hurley and Steve Chen.
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Google Buys YouTube for $1.65 Billion More

Google Buys YouTube for $1.65 Billion

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  • So Google is going to become... (Score:5, Funny)

    by sehlat ( 180760 ) on Monday October 09, 2006 @04:20PM (#16370207)
    a series of 'tubes?

  • YouTube not evil! (Score:5, Insightful)

    by mrbanzai ( 799285 ) on Monday October 09, 2006 @04:20PM (#16370209) Homepage
    SO glad that YouTube will now be sheltered by "the good guys" ... assuming they stay the good guys *cautious glance over shoulder*

    • Re:YouTube not evil! (Score:5, Insightful)

      by vertinox ( 846076 ) on Monday October 09, 2006 @04:48PM (#16370707)
      SO glad that YouTube will now be sheltered by "the good guys" ... assuming they stay the good guys *cautious glance over shoulder*

      I'm more than happy with that. At least now Youtube will have Google Adsense ads rather than Myspaces "epileptic punch the monkey you win a frigging iPod PS3 viagra sweepstakes" flash banner ads with 400 double click pop ups and unders.

      • Comment removed (Score:5, Funny)

        by account_deleted ( 4530225 ) on Monday October 09, 2006 @05:15PM (#16371069)
        Comment removed based on user account deletion

  • cool (Score:4, Interesting)

    by szembek ( 948327 ) on Monday October 09, 2006 @04:20PM (#16370211) Homepage
    will video.google.com still exist as it is I wonder?

    • Re:cool (Score:5, Informative)

      by garcia ( 6573 ) on Monday October 09, 2006 @04:34PM (#16370465)
      CNN says it will [cnn.com].

  • Hmmmm (Score:3, Interesting)

    by jhjmonnee ( 981313 ) on Monday October 09, 2006 @04:20PM (#16370213)
    The bubble will burst on this purchase. There's too much copyright infringement going on @ Youtube.

    • Re:Hmmmm (Score:5, Insightful)

      by motank ( 867244 ) on Monday October 09, 2006 @04:38PM (#16370535)
      well the mpaa and riaa might have been itching to pick on poor little youtube but do they wanna pick a fight with google? i expect google will force these companies to deal with it and accept the internet isn't gonna go away (and share some ad revenue)

      • Re:Hmmmm (Score:5, Interesting)

        by Anonymous Brave Guy ( 457657 ) on Monday October 09, 2006 @04:45PM (#16370647)

        Blockquoth the AC:

        i expect google will force these companies to deal with it and accept the internet isn't gonna go away (and share some ad revenue)

        That's one possible outcome. Another is that Google, already treading a very fine line with several of its existing offerings, has just taken a step too far and is about to be slapped down hard.

        If I were a betting man, I would actually bet against Google on this one. Admittedly, that is partly because I don't like the way they've started taking liberties with others' work and assuming something is OK as long as they're the guys doing it. But mainly, it's objective analysis: Google have some good products, but they have little that's unique, and none of their big revenue generators has a great barrier to entry. They're currently target number one for several other big tech firms, and fighting on all fronts, and I'm sure Sun Tzu had something to say about the wisdom of that approach.

        • Re:Hmmmm (Score:4, Interesting)

          by unity100 ( 970058 ) on Monday October 09, 2006 @07:00PM (#16372303) Homepage Journal
          Google has outgrown any organization like RIAA or MPAA.

          Its on the leading edge of internet progress.

          Internet, is, 'people'.

          Noone can fight against people. Google owning youtube will be a catalyst factor in getting the dinasours realize that we are living in a new world, and pushing the whole WORLD's people for anything outdated is folly at best.

          This will remove one of the 2-3 factors hampering the 'new age' if you will.

        • Re:Hmmmm (Score:5, Informative)

          by TheoMurpse ( 729043 ) on Monday October 09, 2006 @08:44PM (#16373249) Homepage
          And what are they going to be sued under? I mean, the DMCA says that a copyright owner cannot sue until (1)they have submitted a takedown request to Google (formerly Youtube), and (2)Google fails to take the copyrighted material down. For information, read this [copyright.gov] (PDF), a secondary source of law about the DMCA, with analysis. In particular, read the section at the bottom of page 9 entitled Eligibility for Limitations Generally. To my understanding, Google qualifies as a "service provider" under this definition (the definition is in the section, so don't assume it is equivalent to "ISP"). There are 2 things Google has to accomplish: (1)adopt a policy of terminating the accounts of repeat infringers, and (2)not make it difficult for copyright owners to identify and protect their works. Thus, as long as Google (formerly Youtube) has a formal takedown policy upon notification by the copyright owner, they are compliant. And here's a ProTip: Youtube was compliant; they just did not have the financing to battle frivolous suits in court. Google, on the other hand, has very, very deep pockets to fight suits like this. Furthermore, Google seems to be fine under Limitation for Transitory Communications (page 10) as well.

          Even if you consider all I just posted to be weak defense, the kicker begins on page 11: Limitation for Information Residing on Systems or Networks at the Direction of Users. Google meets all three requirements:
          • Google must not have "requisite level knowledge of the infringing activity. Examining what this means (page 12), we see that, because there are so many files on Youtube, they cannot have this type of knowledge (unless, of course, during discovery, a corporate memo was found which cited a specific infringing video that, after the fact, was never removed), which must be knowledge of a specific infringing file, not that infringement is occurring in general.
          • If Google has the right and ability to control the infringing activity then (halt this boolean, we do not need to know the antecedent since it already evaluates to False: Google cannot monitor the millions of files placed on what was Youtube)
          • "Upon receiving proper notification of claimed infringement, [Google] must expeditiously take down or block access to the material" - Youtube did this, as evidenced by the many times Lazy Sunday was taken off Youtube at NBC's request (note that Youtube was never sued for this activity)
          Google also has an agent filed with the Copyright Office to receive infringement claims: here [copyright.gov] (PDF). As a sidenote, it's refreshing to see that a corporation has filed handwritten documents with the Copyright Office; kind of gives them character (or an air of sloppiness?).
          • Quoting from one of many sources this morning:

            "As its negotiations with Google neared a conclusion, YouTube announced partnerships with Universal Music Group, CBS Corporation and Sony BMG Music Entertainment.

            Those alliances followed a similar arrangement announced last month with Warner Music Group"

            So the copyright aspect is frankly a moot point, Google is also promising to share the proceeds of any future revenue with video owners, that will fence off most other challenges.

          • Re: (Score:3, Interesting)

            by Anonymous Brave Guy ( 457657 )

            I'm not disputing the US DMCA provisions here; I don't know enough US law to know what the situation is for sure. However, much of the world does not have such provision, and frankly, I'm not sure the US has a terribly credible position on this one, since they're effectively saying "go ahead and infringe until you're told not to, and then have no penalty as long as you stop when you're caught". There are a lot more copyright holders in the world than Big Media, and a lot of the special interest producers/di

    • Re: (Score:3, Interesting)

      by vertinox ( 846076 )
      The bubble will burst on this purchase. There's too much copyright infringement going on @ Youtube.

      You mean Google's images, cache, and even video doesn't run into the same problems?

      I think it is safe to safe Google has enough IP lawyers and knowhow to take care of any problems they run into.

    • Re:Hmmmm (Score:5, Insightful)

      by Jah-Wren Ryel ( 80510 ) on Monday October 09, 2006 @04:45PM (#16370655)
      The bubble will burst on this purchase. There's too much copyright infringement going on @ Youtube.

      And more importantly, now there is someone to sue. Someone with lots and lots of money, so all those $200K per infringement civil awards actually have a chance of being paid out. Watch for Hollywood to their absolute damndest to take Google's IPO money the same way the RIAA took mp3.com's $200M of IPO cash.

      • Re:Hmmmm (Score:5, Interesting)

        by hypnagogue ( 700024 ) on Monday October 09, 2006 @05:50PM (#16371541)
        Actually, with Google's deep pockets, there is NO chance that the awards will ever be paid out. You seem to have missed U.S. vs Microsoft: given sufficiently deep pockets, you can keep a case alive and churning through the legal morass of the court system indefinitely.

        Prediction-the-first: this will be settled out-of-court, and along the lines of a statutory license.
        Prediction-the-second: you will watch GoogleTV, and the copyright holders will love you for it.
        Prediction-the-third: in the face of TiVo-enabled departures from a supportable advertising model, traditional TV broadcasting will end up losing out since Google will be able to provide exact viewer measurements and demographics and be able to target the most coveted consumer groups.
    • But Google have a plan.

      1. Buy Youtube
      2. ????
      3. Profit

      Just how can they make a profit from youtube? That's an awful lot of advertising google are going to need to sell to recoup their investment.

      Could this be a sign of a new .com boom?

      Shitdrummer.

      • Re: (Score:3, Informative)

        by timeOday ( 582209 )
        Google has answered your ???? with "advertising." And it is working [siliconvalley.com]:

        Google Inc.'s second-quarter profit seems likely to erase any lingering doubts about which Internet company rules the Web.

        While rivals eBay Inc. and Yahoo Inc. merely matched analysts' earnings expectations, Google on Thursday soared well beyond Wall Street's financial hurdle - just like the online search engine leader has done in all but one quarter since it went public nearly two years ago.

        "Google is clearly winning the battle," sa

  • So ungoogle (Score:5, Interesting)

    by Anonymous Coward on Monday October 09, 2006 @04:21PM (#16370227)
    This is so ungoogle. Google builds, not buys. Google indexes, not serves. Google already had a video service.

    Google is jumping the shark.

    • Re:So ungoogle (Score:4, Informative)

      by cp.tar ( 871488 ) <cp.tar.bz2@gmail.com> on Monday October 09, 2006 @04:26PM (#16370341) Journal

      If I understood the situation correctly, Google bought YouTube - among other things - to prevent others from buying it and gaining (more) advantage in the field.

      Furthermore, it is not the first product they've bought either.

      • They didn't buy this site, they got HOSED on it!

        They bought a money pit because their stock went up 2% on news they might buy it. After buying it they're going to go up another 4% or so thus paying for itself. Since 1.65 billion is worth 1.5% of the company, gaining 5% or so means they just made 3.5%. This is short term though.

        In the end I think they get hosed but whatever.

    • Re: (Score:3, Informative)

      by Jeff DeMaagd ( 2015 )
      Google isn't afraid of buying things, so I don't know what you are talking about.

      Google bought a satellite mapping company, an online spreadsheet program, an online word processing program, and a photo management program. It looks like they bought Blogger too. They might have bought SketchUp. The weird thing is that Google didn't already have a service or program for most of the other purchases, this time they already had their Video service but bought YouTube anyway. I think that's a more clear way of
    • Google builds, not buys.

      So I take it you're one of those people who think Google made Google Earth (formely Keyhole) and Picasa from scratch?
    • "Jumping The Shark" already? I could care less either way but you have to believe that Google has some use for them we're not thinking of yet, but then who knows. Maybe they're just in consume mode at this point and spreading themselves...

      Regardless, they got totally ripped off and I'm sure this isn't the last in their path for world monopoli.....I mean domination.

      It does seem out of step for them to do this, however.

      1.65 bil.....man, that's a lot of scratch for a Website that's a money pit in terms of (s

    • Re: (Score:2)

      by thelost ( 808451 )
      That's a slightly romantic interpretation of Google. They're a clever company who knows which side their bread is buttered on, they have to move with the times. As is said by others buying youtube is in part a move to keep it out of the greasy mitts of the competition.

      Also google has a whole host of web acquisitions in its pocket like Writely and Picasa.

      It's kind of understandable that people still see google as an indexing service, not a content service, but this is changing.

      The only thing I am not looking
    • Google is jumping the shark.

      To put it more plainly, YouTube is to Google what AOL is to Timw-Warner.

  • Ill Go Ahead and Say it (Score:5, Funny)

    by moore.dustin ( 942289 ) on Monday October 09, 2006 @04:21PM (#16370229) Homepage
    The Bubble is back! Bubble 2.0, but a bubble nonetheless.
  • .. and legitimacy for YouTube, I guess the first major change will be the removal of all copyrighted video and subsequent policing of the site. At the time of writing, there's a hell of a lot of copyrighted shows on there. Granted, you can't easily download them, but it's still legally dodgy at best and downright illegal at worst.
    • Yeah, it will be interesting to see what stance Google takes on infringing content... I don't think it's possible to clean up YouTube without killing a large portion of its appeal.

  • At that rate, does google want a game company? (Score:5, Funny)

    by cliffski ( 65094 ) on Monday October 09, 2006 @04:23PM (#16370267) Homepage
    Hey google, Thats 24 million dollars each isn't it? I'm a one man company, but you can buy my company (www.positech.co.uk) for just $15 million.
    Give me a call, or just drop me an email guys. That figure is negotiable too.

  • Integration with Google Video? (Score:5, Insightful)

    by mysqlrocks ( 783488 ) on Monday October 09, 2006 @04:23PM (#16370281) Homepage Journal
    Even though they say "YouTube will retain its distinct brand identity" I wonder how much integration they will eventually do with Google Video. Will YouTube videos be search-able on Google Video, for example? Google is usually good at not integrating just for the sake of integrating. For example, Google Analytics still uses a Flash based map instead of the Google Maps API.

    • Re: (Score:2)

      by garcia ( 6573 )
      Google is usually good at not integrating just for the sake of integrating. For example, Google Analytics still uses a Flash based map instead of the Google Maps API.

      IMHO that was an example of why Google *should* integrate. Google Analytics' flash map absolutely blows. It's basically worthless unless you are looking at the world overview. The second you want to see anything close up it's shit and you can't navigate it very well.

      I'd give anything for them to make that section of Analytics more useful as

      • Re: (Score:3, Insightful)

        by mysqlrocks ( 783488 )

        IMHO that was an example of why Google *should* integrate.

        I wasn't necessarily saying that they should or shouldn't have used the Google Maps API, just giving an example of where, from a strictly technological point of view, it would have made sense to integrate but they chose not to integrate for whatever reason. I'm guessing that all of the Urchin users that were switched over to Google Analytics have an expectation as to how that feature works and Google wanted to be cautious about changing a feature ou

  • Yoooooooooooooutube

    :)

  • Good buy for Google (Score:5, Insightful)

    by sbrown123 ( 229895 ) on Monday October 09, 2006 @04:23PM (#16370285) Homepage
    I know some people won't get why they did this, or how Google will make money from YouTube. I will explain:

    First, Google makes money through advertisement. Currently simple text banner ads. But a quick look at other sites will show you a growing interest in video ads. YouTube has a lot of visitors, and if Google plays this correctly they can make more advertisement dollars.

    Secondly, YouTube signed some nice contracts with the likes of CBS and two music labels.

    • Re:Good buy for Google (Score:5, Insightful)

      by sporkmonger ( 922923 ) on Monday October 09, 2006 @04:40PM (#16370545) Homepage
      I expect it was the contracts more than anything that justified the price. The original purpose though, was almost certainly to consolidate the two biggest video players into one. That said, the only reason this happened at all was because it was an all-stock deal. Google's stock was at around $430 today, which a lot of people seem to think is still over-valued, especially by people within Google. If the internal Google people think their own stock is over-valued, it makes sense for them to try to get the most out of it while it's still high.

    • Golden Google (Score:5, Interesting)

      by fm6 ( 162816 ) on Monday October 09, 2006 @05:21PM (#16371177) Homepage Journal

      None of which explains why Google thinks YouTube is worth $1.65 Billion. There are a lot of big profitable high-tech companies that aren't worth that much. Selling text ads? They don't need to buy the company to do that. Selling video ads? They have their own video technology.

      Not that it matters. Google can spend its money its money the way it wants, because it has more than it knows what to do with, and because its stockholders are shut out of corporate decision making. So it can buy companies that have no hope of contributing to the bottom line (Picassa, Outride, lots of blogging and social networking providers). It can hire lots of talented people. (And not so talented. Some of the people who've gone there recently are better at self-hype than actually making stuff.) And it can do this without any concern about making money.

      Why is this bad? Because you have a lot of money, resources, and talent being used to subsidize what amounts to high-tech masturbation. Google gets bigger and bigger, and yet they release very few new products. And the products they do release stay in beta mode forever.

      And please, don't try to tell me that "beta" is just a marketing or legal gimmick. Products like gmail, Google Groups, and Google Maps have lots of cool features, sure. But they're unpolished, inconsistently implemented, and very poorly documented. But most of all, they lack the boring little features that separate a toy project from a a real product.

      Financially, Google is big success. But when it comes to pushing technological progress, they're a ship without a rudder. A very fancy ship, mind you, with free gourmet meals for the crew, and lots of conveniences and gadgets. But where is ship going. Nobody seems to know.

  • And how much more to settle all the copyright infringment claims? Google's problem here is that they have deep pockets. Makes them much more of a target.
    • Those deep pokets also make them a great partner for the copyright holders. Google definitely planned a profitable deal for the media moguls before purchasing YouTube. There will definitely be some mutually beneficial deals announced in the near future.
    • The anti-net-neutality companies will see Google as a giant deep pocket as well, now that YouTube has the resources to double-pay for its bandwidth.

      • The anti-net-neutality companies will see Google as a giant deep pocket as well, now that YouTube has the resources to double-pay for its bandwidth.

        Except for the fact that Google's deep pockets are full of fiber. Remember, they've been buying up dark fiber for years; all they have to do is light it up, and they could cut down a lot of their transit on other networks. The threat of that, and the resulting lost revenue, ought to be enough to keep ISPs in line.

  • There goes 50% of Youtube content (Score:4, Interesting)

    by GillBates0 ( 664202 ) on Monday October 09, 2006 @04:27PM (#16370347) Homepage Journal
    This IMHO probably spells doom for a large percentage of content on YouTube. I for one, used to find it useful to catch up with some good scenes from say, the newest episode of SouthPark without having to wait for a rerun.

    True, Warner has embraced it's content for ad revenue, but I'm sure Youtube was treading on a thin edge, and would've had their a55es sued sooner or later.

    This will just expedite the inevitable, and I expect Google to quickly unpublish most (C) content to save their a55es. That'll probably reduce it to what Google Videos is right now, fun, but with very limited content.

    Goodbye, Youtube, it was a good run while it lasted.

    Deep Pockets (TM) invite lawsuits ~GillBates (2006)

    • Re: (Score:2)

      by joe 155 ( 937621 )
      do you not think that this might lead to whole episodes online via ad supported methods? I kinda hope that it does... still, I'm also hoping that they will let the site work without flash, for all us Linux users... or at least include a download like you get with google video.

      I still feel, though, that deep pockets invite better deals

  • Explain to me... (Score:4, Interesting)

    by Nafai7 ( 53671 ) on Monday October 09, 2006 @04:27PM (#16370353)
    I keep seeing all these comments about "copyright violations" on youtube... is a 5 minute daily show clip a copyright violation? Is there such a thing as fair use? Does youtube (now google) have some sort of common carrier for video defense they could claim?

    I'd like to see some serious commentary on this, and not just the assumption that youtube voilates copyright. I spend probably and hour a week watching stuff on youtube, and I'm sure over 95% of what I see does NOT violate any copyrights.
    • This is what I'd like to know as well. I'm more than happy to pay a few bones to see an old episode of a television show. But part of what has made YouTube so phenominally successful is you could go check out that really good segment of Olberman or Colbert Report that you missed last week, but everyone is talking about. Google could very well kill YouTube and gain nothing in return of value.

    • Re:Explain to me... (Score:5, Informative)

      by 1point618 ( 919730 ) on Monday October 09, 2006 @04:42PM (#16370587)
      IANAL, but I'm taking Computers and the Law, a course at my university about these matters.

      The length of a clip is not the only thing that matters in claiming fair use: also important is the importance of the clip in regard to the entire work, whether the original work is more factual or more creative, and what effect the use of the clip will have on the saleability of the work as a whole. It actually cannot be known whether using a copyrighted material falls under fair use until one is sued over that material and goes to court for it, as fair use is up to a court to decide.

      Also, even if the clips' being posted on YouTube violates copyright law, YouTube likely isn't liable for first-party violation, as they did not make the copies themselves, and they might not be liable for 2nd or 3rd party copyright violation if they can prove that they did not market YouTube as a place for copyrighted works to be posted by those who do not hold the copyright, and if they can show that they took appropriate measures to remove materials in violation of copyright.

      However, it is best to assume that any material you see on YouTube that was not posted by the author IS in violation of copyright, as there have been no rulings in this regard, and unless an author specifically gives up his copyright or publishes the works under an open license (which still lets him retain copyright, but lets others use and distribute the work as well), then he has the right to sue for infringement, and YouTube will at very least be required to take the work down if they cannot prove fair use or de minimus (least possible to make a point) use of the materials, or that the work was in the public domain.

      So, how are you so sure that the content does not violate the authors' copyrights?

    • Re: (Score:3, Insightful)

      by Anonymous Brave Guy ( 457657 )

      I'd like to see some serious commentary on this, and not just the assumption that youtube voilates copyright. I spend probably and hour a week watching stuff on youtube, and I'm sure over 95% of what I see does NOT violate any copyrights.

      Whereas at least half of the stuff I've seen on YouTube and the like blatantly violates copyright (for example, because it's a complete copy of a special interest DVD), and a lot more is infringing on technicalities (for example, because it's video from a dance competit

  • 1.65 billyun. (Score:3, Interesting)

    by Inoshiro ( 71693 ) on Monday October 09, 2006 @04:27PM (#16370357) Homepage
    1.65 you say? Why keep working -- that's just shy of 25 million dollars in stock per employee. I'd cut and run. Wouldn't you?

    Why stick with a company that has a potentially uncertain future, when you can go and start doing whatever you want (founding various cool companies that might be even better), or simply go do charity work.

    • Re:1.65 billyun. (Score:5, Funny)

      by kevin.fowler ( 915964 ) on Monday October 09, 2006 @04:37PM (#16370507) Homepage
      Dear Google, Thanks for the 25 million junior bacon cheeseburgers. I hope you like getting sued. -The management

    • Re: (Score:3, Informative)

      by kma100 ( 949502 )
      The VC's and founders take a larger percent of the total than the rest of the employees. So the $25MM you mention is way off base.

    • Re:1.65 billyun. (Score:5, Interesting)

      by Chris Pimlott ( 16212 ) on Monday October 09, 2006 @04:48PM (#16370703)
      What makes you think that the stock is evenly distributed among all the employees? Don't forget that the VC firm also has a big chunk of it (quite possibly the largest chunk). After that, the founders will have the lion's share.

      Anyhow, they can't just sell the stock and run. They'll have to wait some specific amount of time before being able to sell.

    • Re: (Score:3, Interesting)

      by LetterRip ( 30937 )
      "Why stick with a company that has a potentially uncertain future, when you can go and start doing whatever you want (founding various cool companies that might be even better), or simply go do charity work."

      Because the terms of the purchase almost certainly included clauses such as the stock not being tradable for 5 years, and that the employees agreed to remain for 3 years or such.

      LetterRip

  • Why did YouTube take the lead? (Score:5, Interesting)

    by ObligatoryUserName ( 126027 ) on Monday October 09, 2006 @04:31PM (#16370415) Journal
    Is it because Google fumbled around trying to implement some sort of open-standards solution while YouTube built up a userbase with the corporate controlled but much more user friendly Flash format? (Egad, it even uses patented video codecs that Macromedia licensed!)

    That's at least part of the answer.

    Ouch Slashdot. $1.65 Billion. Ouch.

  • Good idea? Bad idea? (Score:2, Interesting)

    by Achoi77 ( 669484 )
    I had a quick discussion about this with my coworkers a few mins ago. Most of us generally agreed that there were certain things that google would definately want from youtube, but we were unable to put a finger on it.

    Some of us concluded that it was mostly going to be:

    a. the users and more importantly
    b. the usage pattern of these users

    While google has been picking up little things here and there, essentially this is google's first real "social networking" site that they have purchased. I say it in qu

  • google (Score:5, Funny)

    by Anonymous Coward on Monday October 09, 2006 @04:34PM (#16370473)
    Does this mean that YouTube will now go into Beta status?

    Too, I wonder how google will integrate the two.

  • implausibly stupid? (Score:2, Interesting)

    by Surt ( 22457 )
    I mean ... seriously ... they didn't think they could wipe YouTube off the map for less than 1.6B?

    Think of the advertising, software, and video servers they could have bought with that money.

    If I were a google stockholder I'd be a) furious and b) selling. This really makes google look like they're losing their way.

    • Re: (Score:2, Insightful)

      by bobsledbob ( 315580 )
      Well, remember, this is a STOCK ONLY deal. There is no cash exchanged. So, if you're angry, you should be angry at the dilution of the stock. But, you can't be angry at what "they could have bought with that money." To Google at this point in their history, the deal was practically free.

      You've seen that Simpson's where Bart works for a dotcom, right? You know, how the stock is worth toilet paper? That's somewhat close to the view from the inside when making deals using stock. It's like free money to
    • Think of the advertising, software, and video servers they could have bought with that money.

      Not so much, because it's not real money; they are paying in GOOG stock, which according to many people, it's overvalued.

  • How fast can Google get the IP off of their newly aquired servers?

    -Rick
  • Now all google has to do is figure out a way to manage copyright and necessary royalty payments and pruning of material that can't be licensed satisfactorily between parties. Then they got to make a buck.
    For the majority of the little videos of skaters and stuff that are not advertising supported all Google needs is a universal micropayment system going in or an escrow account system going out to store payments until a threshold payment-unit is reached. And if you could use your standard bank debit card

  • $1.65 billion IN STOCK (Score:5, Insightful)

    by tpengster ( 566422 ) <slash@@@tpengster...com> on Monday October 09, 2006 @04:43PM (#16370613)
    Keep in mind that Google is not paying dollars -- they are trading Google stock for YouTube stock. So even though $1.65b is a scary number, what you should be asking yourself is not whether YT is worth $1.65b, but whether it is worth 1.25% of Google.
  • But they paid LESS per copyright violation then anyone else! Less then a dollar per copyright infringement for sure.

    Nice deal!

    Too bad every IP lawyer in the US just got a call that the deep pockets took the bait, and will be working full time suing Google for months.
  • My YouTube experience is:
    Hello, you either have JavaScript turned off or an old version of Macromedia's Flash Player. Click here to get the latest flash player.

    Neither Javascript nor Flash are required to show videos (all you have to do, is link to a .mpg) but they're required by YouTube to show a video. Lame.

    Perhaps Google will be fixing this?

  • I smell doom for all advertising companies. Google, a company that makes revenue off of advertising purchases a site frequently visited by the world.

    It does not even matter if there are pending lawsuits against YouTube or Google. They'll find ever means to fight the suits or settle.

    I'm in shock the venture capitalist company didn't try to intervene when knowing their competitor was going to purchase their VC investment.

    Online + Video + TV + Advertisements + $400/stock company = Nuclear Launch Detected

  • Google made money on this (Score:5, Insightful)

    by nate nice ( 672391 ) on Monday October 09, 2006 @05:00PM (#16370891) Journal
    Although I disagree with this long term, what most people haven't realized is that Google got YouTube for free. On news they might buy last week, their stock rose ~2%. It rose even more today with more news and will probably raise a bit more tomorrow. So, 1.65 billion in stock was given away which is something like 1.5% of the company. If they just increased the companies worth by 5%, did they not just make a profit buy "buying" this company?

    Long term it might not turn out that way, but annually this is great.

    • Re: (Score:3, Informative)

      by MotorMachineMercenar ( 124135 )
      Correct. Google gained the $1.65Bn back (and change) as the share price went up from $423 to $429 within hours of the announcement on Monday morning. At 304 million shares outstanding the "change" adds up to almost 200 million...

  • More information (Score:3, Informative)

    by Cosmo-san ( 900715 ) on Monday October 09, 2006 @05:07PM (#16370991)
    A webcast of the conference call can be found at http://investor.google.com/webcast.html [google.com] in real player and windows media player format. The good part is a few minutes in when they start taking questions.

    Most of it is about how each (youtube and google) will contribute to each other. They also talk a bit about financials; why google used stocks instead of cash, what youtube's revenue is, etc. Long webcast, but informative.

    "Google video will not go away, ever." - direct quote from the webcast. The only integration the talk about it about google search in youtube but do say they plan to integrate more.

  • "Stupid?" Please justify. (Score:5, Insightful)

    by tpengster ( 566422 ) <slash@@@tpengster...com> on Monday October 09, 2006 @05:17PM (#16371107)
    OK, I'm seeing a lot of posts calling this acquisition "stupid" and i'm seeing the word "bubble" a lot. Now, many of these posters may know exactly what they are talking about, they may be far more informed about the business prospects of both companies than I am.

    But if you just say "this is stupid" without any analysis of the future earnings of these businesses, you are adding nothing to the discussion.

    Consider the following: Google is paying approx. 3.85 million shares of Google for YouTube. What is the value of those shares? Probably less than you think. What kind of competitive advantage does google have to justify such a high P/E ratio? They have the smartest technical people in the valley, and a great culture, those have to be worth something. But I'd argue that thy aren't worth $430 a share. What happens to google.com's traffic once people start using MSN search by default in the IE7 search box? Well, I can't tell you exactly what will happen, but I've got a decent guess. It'll PROBABLY GO DOWN, at least the growth rate. Does this sound like a company that is worth 62 times earnings ($130b by market value)?

    I'd argue that if there's a bubble here, it's probably in the price of Google, not the price of YouTube. These things are hard to predict because you don't know exactly how the technology, and the underlying social dynamics of the users, will play out. And yes, the legal issues are thorny and I don't feel qualified to analyze those (though I'm sure Google's lawyers are more than qualified to). But i'd argue that Google ought to be making MORE acquisitons with its stock, not fewer.

  • Google The Acquisitor? (Score:3, Interesting)

    by blueZhift ( 652272 ) on Monday October 09, 2006 @05:58PM (#16371633) Homepage Journal
    This purchase makes me wonder if this is just the beginning of big acquisitions for Google. While YouTube is not Google's first acquisition, up until now most have generally thought of Google as a company that prefers to build its own stuff. Indeed, Microsoft has often faced derision for being a company that has grown by buying up companies with innovative products/ideas. Personally, I don't think there's any evidence that Google has abandoned the build it ourselves attitude. Given the buzz and interest in YouTube, the acquisition may be more of a defensive buy than anything else to keep it out of the hands of Microsoft or Yahoo.

  • goldmine (Score:3, Interesting)

    by e**(i pi)-1 ( 462311 ) on Monday October 09, 2006 @07:44PM (#16372761) Homepage Journal
    Google has realised that the days of TV as we know it, are counted. The future is to search for specific movie content and get it, without having to keep an eye on dozens of channels, watch stupid adds or be informed with filtered news or tainted, politically biased comments or worse, propaganda payed by governments. It is an other consequence of globalisation. Everybody can become a content provider. The public finally can determine what it wants to see and what to toss away.

    This is going to explode in the next years. Consumers are already able to build their own program and contribute to it. User feedback of millions of people is automatic and be valuable for content providers. The web allows to monitor exactly when and what people see and when to target which group with advertisement. It will be no problem to milk this new medium. It will also be fantastic for research of all kind. Companies, political parties etc which are able to harvest from a large amount of data and even pay for that. It will be the key for political power too.

    It will a gold mine. 1.65 billion now is nothing. Lawsuits will be coming but this will come from the losers of the game and dropping those will not matter anyway. Let them protect their content so that nobody will watch it any more. Being "in the show" will be the main goal in this new game. It might even happen that companies pay for what one calls "copyright infringement" today They will finally realize that spreading the content is more important than to disappear in the oblivious.

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