Google and YouTube - It is a Good Fit

Authored by Jay Baage on October 6, 2006 - 6:14am.

This Friday morning, rumors of that Internet search giant is in talks to buy online video site YouTube for $1.6 billion appeared in the Wall Street Journal (WSJ), giving additional credability to earlier rumors reported on the blog TechCrunch. WSJ cited "a person familiar with the matter", but neither Google or YouTube would comment on it as of early Friday. Shares of Google were up by around 1% in mid-day trading on the Nasdaq stock exchange.

Google has a warchest of cash and its efforts to grow in video would naturally benefit from tapping in to the video phenomenon that is YouTube, with over 100 million videos like Lonelygirl 15 (pictured above) watched every day.

The main concern that a potential buyer of YouTube probably has is how to handle the issue of copyrights associated with many of the videos posted on YouTube. Internet veteran Mark Cuban recently said that "only a moron" would buy YouTube, because as soon as a big company with money backs up YouTube, it would be "sued into oblivion" by the copyright owners to the many videos posted on YouTube.

There are, however, many signs of that those copyright issues are being worked out. Many media companies are starting to realize that having your content on YouTube and allowing people to interact with it and share it with their friends on blogs etc is great publicity. For example, read my piece here from last week about how Fox News reacted to the Wallace-Clinton interview being posted on YouTube.

It is clear that a network of millions and millions of users of internet video is worth a lot of money, but the question is how much? $1.6 billion is almost three times as much as News Corp paid for MySpace last year.

Related Links:
Sorry Mark, but Prospective YouTube-Buyers aren’t Morons
Fox News: Internet Division Used "Poor Judgment" When Removing Clinton Clips from YouTube
Analysis: President Clinton on Fox News, But Not On YouTube
YouTube Dances a Fine Line
YouTube Sued for Copyright Infringement of L.A. Riots Beating Video