Google Acquired YouTube For $1.65 Billion
Google Inc. announced today that it has agreed to acquire YouTube for $1.65 billion in a stock-for-stock exchange.
Both companies have approved the deal, which should officially close in the fourth quarter.
YouTube will retain its brand identity, strengthening and complementing Google's own fast-growing video business. YouTube will continue to be based in San Bruno, CA, and all 65 YouTube employees will remain with the company.
Google hosted a conference call and webcast at 1:30 p.m. Pacific Time today to discuss the acquisition. A replay of the call will be available until midnight Monday, October 16 at 888-203-1112 domestically and 719-457-0820 internationally.
Sergey sais "Google’s mission is to organize the worlds information…and video is an important part of the worlds information".
Sergey said that integration with search is going to be important, and that they will be experimenting. Eric said that Google Video is not going away. via
The user base and momentum of YouTube are the obvious reasons behind this acquisition. I am guessing Google management isn't too optimistic about near future prospects of Google Video either. They didn't have a clear answer on monetizing YouTube.
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October 14th, 2006 at 8:09 pm
Here is my take. I think the main motive behind the acquisition is more towards video ad revenue rather than information accessibility. However, they had to pay a really high price for that along with many loopholes such as legal liability from copyright holders that could wipe out YouTube from existence like Napster. Another issue, is that copyright law is quite vague in terms of online interpretations and that could play a major role in Google’s legal liability. So, I would suggest that Google and YouTube spend some real time and money trying to convince these copyright holders to establish partnerships with them as they have with Universal and Sony. On another front, they are going to also motivate yahoo and microsoft to start advancing in their video services as well as possible acquisitions. If this becomes succesful, yahoo and msn are going to feel the pain of not taking action of acquiring youtube. Well, it is really the choices and the actions we take that really determine the success. Lets wait and see.
October 16th, 2006 at 4:02 am
I am assuming they have some preliminary plans to monetize YouTube, with Google Ads perhaps. I know I wouldn’t have done it, if I was in Eric’s chair.
It is also a tacit admission that their 20% projects aren’t that successful as they would like us to believe