Having a one of a kind market product can never be overpaid... But they should find ot how to make it bring money home, that could help......
awallafashagba
· 2 months ago
Google made the right choice. Even if i am a fan of Vimeo it just isn't YouTube - you can find everything you ever need there - Everyone goes there and looks for music videos and clips - and eventually that's where the revenue will come from
SocialSplash
· 2 months ago
You Tube isn't just a website...it is an amazing distribution platform.
no overpayment here....its one of Google's most valuable assets.
Rob Wilmot
· 2 months ago
I read an interesting article in Wired Magazine a few months ago where Eric Schmidt articulated that one day Google would find a way to monetize the eyeballs. It must be wonderful to be so cash rich and so powerful in a marketplace (search) that you can afford to take out the competition, pay vast overheads, including hosting and bandwidth costs (I read $753 million annualized - 2 milion dollars a day based on calculations made by Bear Stearns & Co. Inc. , comScore, Credit Suisse, and Google itself.) All credit to Google, and good luck to them. They are making stragegic descisions and acquisitions based on cross subsidisation from profits in another part of the business - wouldn't we all like to be able to do this?
mikeology
· 2 months ago
The question is not answerable, at least not intelligently, unless we are provided with an estimate of what YouTube earns or loses per year, and unless we can determine whether YouTube somehow prompts a meaningful percentage of users to visit other revenue-producing Google sites. The fact that everyone visits the site does not mean the site will ever turn a profit: Given the quality and viewership of most YouTube videos, we can assume that the average video hosting expenses per page greatly exceed any reasonable ad-revenue expectation per page for the foreseeable future. Where has it been conclusively determined that mere hype is worth an extra $1 billion up front plus hundreds of millions per year in losses? So, how will YouTube monetize very expensively hosted home videos? Cross-subsidization will only be tolerated for so long by shareholders who remember previous tech-industry bubbles. If one part of a business becomes a perennial financial sinkhole, investors will eventually demand a de-merger or a pricier subscription plan.
larrymilla
· 2 months ago
Well, I never thought it was a bad deal 'cos till now, it's still speaking for google in the area of web dominance.
PRBristol.co.uk
· 2 months ago
It bought,what is now, the world's second largest search engine and potentially its biggest competitor. Game, set and match... Google.
esjay
· 2 months ago
Looking at the Trends graph: http://www.google.com/trends?q=youtube%2C+faceb... I'd rather own Youtube than Hulu or Vimeo, right now. Even if Google can only monetize a tiny percentage of their traffic, their traffic is already orders of magnitude above either video site. YouTube is playing in the social network stratosphere (and doing so much better than Orkut). Competing video sites aren't even a blip on that chart. It was a good fit because YouTube scares and delights everybody, just like Google.
esoomllub
· 2 months ago
There is always a premium to being first to market (or biggest in the market). Either you pay it when building, or you pay to acquire. I'm not a frequent youtube viewer. When I want to find a video that I hear others chatting about though, I go straight to youtube.
david sloly
· 2 months ago
its a tough one to call, but honestly i think Google did the right thing. after all isnt YouTube the second largest search engine on the net?
Billy
· 2 months ago
Definitely the right choice since Google now owns the 2 highest trafficked and used search engines. Also, people love sharing videos above all else.
alextgrant
· 2 months ago
I think that Google probably cared very little about revenue streams from youtube. It was more important for them to stop anybody else acquiring it and leveraging it in order to challenge the tight grip google has over the internet users (i.e. almost everyone in the world). An extra billion is not much to pay to nip any challenge at the bud like they have managed in doing the deal in the first place.
BerislavLopac
· 2 months ago
Actually, I don't think Google's main intent was on acquiring users, but on making sure that they have a say in future litigation.
Chanda | BizDharma.com
· 2 months ago
Absolutely Worth it. As you very well mentioned after 3 years if there is one site that comes to mind about Video and broadcasting its You Tube. Also one thought that I had was with more and more search products on the shelf by Google, Video search was a bit obvious. Now either it could just cache the tags on videos or Download the whole videos on its hard disk to provide search. We already have "Similar Images" search with Google, Similar Videos would as it is require Google to shell out that much cash. And once these sites start generating revenues You Tube will require least effort. So all in all it was a absolutely worth it buy !
Jared O'Toole
· 2 months ago
Looks like the right choice. As long as youtube stays the market leader by such a huge margin they can find a way to leverage that. Either way all those users are using a google product instead of a competitors.
The question that should be asked is whether google gained any synergy benefits from the deal. If it was able to share costs, use youtube to promote google products enough, and find areas where they are better able to run youtube, then google would hopefully earn more than they paid from the deal.
Senderok Allen
· 2 months ago
Considering that YouTube had 98 Million visitors in July 2009 according to this new article from today http://www.ploked.com/facebook/facebook-moves-t..., that is more than Facebook had in July (and its 50% of the reach of the entire Internet which was 200 Million) and it is still the leading place to go to search for videos (among English speaking people - there are several reasons why others might not try YouTube first), then the folks at Google certainly seem to have shorn up their status as a place to search for text/video content that isn't books (an area they are also not slouching on). One would have to compare this $1.6B with the total perceived value of Google itself (and over time).
With more and more thoughts/knowledge = content being transferred by regular people from blog entries to video entries (hindered often mainly by the feelings of needing a bit of privacy), video will take more and more of a percentage of knowledge content to search for.
Google didn't want to lose the title of search king if and when video trumped text...plain and simple.
Note from that Ploked article that the AOL Ad Network apparently had more overall reach (visitors compared to overall Internet users) in July than Google did.
JTierney
· 2 months ago
It is the second largest search engine in the world - the revenue will come as the technology and business models mature. What would one pay for the world's largest search engine? Perhaps that puts it in a different perspective.
Jason Beinstein
· 2 months ago
I think Google did the right thing in buying Youtube. Granted they may have overpaid, and will probably not get their money back on the investment. Youtube has the same staying power that Google does. When searching for anything on the web it's Google this or check out this video on Youtube. The amount of user generated content on Youtube is second to none. They are both such behemoth's in their respective spaces that it's hard to say this was a bad investment.
Brad F.
· 2 months ago
I think it was a good move for them to buy YouTube. It helped to spread the Google name more. A lot of people today think Google IS the internet. That's bad in some ways, but good for Google.
mikeology
· 2 months ago
YouTube is not a true video search engine, it is a search host. That makes it vulnerable to true search engines, just as news host sites became vulnerable when Google News emerged. As soon as someone comes along with a better search engine that covers YouTube and the other video hosting services, Google will be stuck with a hosting service that loses hundreds of millions of dollars per year. The logic that says Google should buy hosting services in order to improve search might just as well be applied to the whole Internet; one could argue that Google should buy the top 10 website hosting services in order to improve search. That would be nuts. Also: YouTube is limited in its distribution capabilities: YouTube videos must remain hosted and watermarked by YouTube, and therefore cannot be effectively syndicated for profit by their creators. Creators must go to the other video hosts for true distribution/syndication capability.
paramendra
· 2 months ago
YouTube is yet to be monetized. It will be monetized. So, no, not overpaid.
Kamran Razvan / Click & Pledge
· 2 months ago
I am yet to see lots of negative numbers adding up to a positive numbers. All my years of studying math has thought me that about negative numbers. Frankly over the years I have not seen anything innovative out of Google. Yes they have a great search engine and that is currently their cash cow but what else do they have? Please note that a while back they hired lots of top notch programmers and scientists. One only expects that all that brain power in one place will innovate and change a paradigm or two. YouTube is a free hosting site for video. Are the ads working in that space? There are lots of stats about how ads in social spaces are not working. I also wonder about Twitter and if that can possibly make money. Of course when one has that much money one can buy everything out there and hope one of them eventually works as the next best thing. Free is a powerful word and having loss leader is a proven concept but let's hope the loss leader does not become a burden anytime soon.
Jeremy Campbell
· 2 months ago
Short term the $1 billion premium seems really high but going forward as we enter a more video centric Internet there will be massive value in having the indisputable #1 market leader in YouTube. Eventually YouTube may become Google's top property to both drive revenues and profits. I say Google made a bold but solid decision.
elves
· 2 months ago
Google never wanted make much money of it, Google only wants dominate the internet and this is proftable.
Abraham González
· 2 months ago
Definitely no, google didn't overpaid for Youtube. Youtube would be more expensive in five years and google know how to earn money, so they will find the way to do that. They just bought it before someone else find the way to duplicate or triplicate the earns of Youtube.
barringtonarch
· 2 months ago
i just hope they don't scare us all off, whilst trying to monetize it.
javier_ramos
· 2 months ago
Google knows..They have a lot of graph thingies calculating everything on an insanely minute level. I doubt they miscalculated it.
TheEnglishSpy
· 2 months ago
Google/YouTube has contracts with major tv/movie publishers. So if Youtube allows a monthly subscription for $5? per month, allowing you to watch 165 thousand high quality series, movies etc. hooked up to your pc or tv ....
And if only a fraction of the million visitors agrees to sign up for this online TV subscription (leaving their home tv provider, with only 50 channels) .. well, I think the revenue per month will go up anyway. :-)
finalwebsites
· 2 months ago
:) After all the time we that the price was to high. On the other site I think Youtube is very important for Google. Videos are the future medium for advertising (Much cheaper than TV commercials)
lia84
· 1 month ago
Check out this cool photo tagging software called Fotobounce! It can help you sort your images using face recognition! It can also download & tag your photos from facebook & flickr! You can get it for free at: http://fotobounce.com/index.php?blog
sahith
· 1 month ago
definitely a worthy choice. because that was a google choice :)
youtube proxy
· 1 month ago
definitely no, youtube needs google but google doesn't need youtube to survive you see..
All Comments
no overpayment here....its one of Google's most valuable assets.
http://www.google.com/trends?q=youtube%2C+faceb...
I'd rather own Youtube than Hulu or Vimeo, right now. Even if Google can only monetize a tiny percentage of their traffic, their traffic is already orders of magnitude above either video site. YouTube is playing in the social network stratosphere (and doing so much better than Orkut). Competing video sites aren't even a blip on that chart. It was a good fit because YouTube scares and delights everybody, just like Google.
http://Evolvhealthy.com
http://blastoffpress.com
With more and more thoughts/knowledge = content being transferred by regular people from blog entries to video entries (hindered often mainly by the feelings of needing a bit of privacy), video will take more and more of a percentage of knowledge content to search for.
Google didn't want to lose the title of search king if and when video trumped text...plain and simple.
Note from that Ploked article that the AOL Ad Network apparently had more overall reach (visitors compared to overall Internet users) in July than Google did.
And if only a fraction of the million visitors agrees to sign up for this online TV subscription (leaving their home tv provider, with only 50 channels) .. well, I think the revenue per month will go up anyway. :-)
After all the time we that the price was to high. On the other site I think Youtube is very important for Google. Videos are the future medium for advertising (Much cheaper than TV commercials)