Google buys YouTube - updatePosted on 09/10/06
According to the Wall Street Journal Google has plans to purchase the popular video site YouTube. The Wall Street Journal also added that Google would pay upto $1.6 billion for the startup which is currently struggling to find a sustainable revenue model to cover its massive bandwidth costs. Add to this copyright infringement issues since much of YouTube's content has been uploaded without permission and you have a perfect cocktail for selling as rapidly as possible. For Google the purchase would a perfect addition to its adnetwork as it is experimenting heavily with online video advertising. Plus the company sits on almost $10 billion of liquid funds and no debt. However, the purchase of Youtube would also bring an extra huge amount of worries due to the massive copyright infringement issues as mentionned above. Since Google has its own share of problems to handle with (click fraud etc) it would be rather weird that they'd be open for purchasing a notorious future troublemaker like Youtube. Also, the Wall Street Journal credits a blog post for the initial scoop with the title "Completely Unsubstantiated Google/YouTube Rumor"... Need we say more? But surprise, surprise! Last night Google did announce that they will take over the company for $1.6 billion. The brand YouTube will continue to exist. GoogleVideo in the meantime signed an agreement with Sony BMG Music Entertainment and the Warner Music Group. Both companies will deliver music videos for the Google Video-site. It is yet to be announced how Google intends to take care of the potential huge copyright problems with the popular video-site.
Posted by B. Van Isacker
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