AfterDawn: Tech news

Google buys YouTube for $1.65 billion

Written by Petteri Pyyny (Google+) @ 09 Oct 2006 23:36 User comments (27)

Google buys YouTube for $1.65 billion Search engine giant Google announced on Monday that it will acquire the video sharing phenomenom YouTube for $1.65 billion (appx. 1.31 billion).
YouTube, which was found in February, 2005, became rapidly a global phenomenom, representing the "Web 2.0" ideology where users generate all the content available on the site. The site didn't exactly offer anything new or ground-breaking in terms of video sharing, but it managed to merge the ease of use and the "Web 2.0" in a way that attracted millions of users right from the beginning.

Google quickly tried to emulate YouTube's service with its own Google Video, launched initially in April, 2005 and later expanded to allow watching videos via browser in June, 2005. But as rare as it is for Google, the service was left to become the "number two" in video sharing business.

Google will pay the $1.65 billion in stock, even tho company sits on a cash pile worth more than $10 billion. Since the initial rumors about the acquisition started spreading late last week, Google's valuation has grown by more than $4 billion -- three times the price it agreed to pay for YouTube.

By acquiring YouTube, Google now becomes a giant also in the rapidly growing video advertisement business. Google has managed to change the landscape of the traditional banner advertising with its AdSense ad network and now it is interesting to see how YouTube, Google's own Google Video and the Google's massive ad network will merge after the acquisition.

The deal has, however, some dark clouds over it, in terms of possible legal troubles from content owners. Some analysts have claimed that YouTube's business is solely built upon users sharing copyrighted material illegally via the site. Now it is interesting to see whether Google manages to continue its recent efforts to make pacts with content owners and to secure the future of YouTube.

Source: Reuters

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27 user comments

110.10.2006 0:02

wow that is a lot of money I wonder if YouTube still will be the same though under new management? YouTube is great but I am wishing Google do not decide to change things too much.

210.10.2006 0:46

I wonder who are in charge for this buying thing. Who work for Google? I really want to know. Because it seems to me that Google is mysterious, like, unreal or something. Blogger was bought by Google also. Google really concerns my curiosity.

310.10.2006 2:46

it is like Google want to own the internet or something. And the reason they became number two in video sharing is because, in my opinion, it did have the ease of use that something like YouTube has, in terms of uploading and sharing videos. If Google had tried to compete atleaset and try and take a leaf out of Youtube's book then maybe Google Vid might have stood a chance.

410.10.2006 5:01

Damn, 1.65 billion... damn.

510.10.2006 5:42

hell thats pocket change for google. wish i had that money

610.10.2006 7:16

unbelievable, it's hard to believe that that site grew that much in popularity for the 2 years it has been around, and only run by 67 people. Good for them, through some money this way for your loyal supporters.

710.10.2006 8:42

Wow, its kind of hard to believe that Google just started as a Stanford college project and it took off. Then they started AdSense and other opportunities to make money and it skyrocketed their net worth. The founder and co-founders worths are combined somewhere close to $40 billion I think (Sorry I can't find a recent article on it).

810.10.2006 9:39

Damn, 1.65 billion... damn.
That really isn't THAT much to buy out a company. I know my dad's company merged with another for 40 billion and now they are at like 60 or 70 billion.

910.10.2006 9:44

Its true tocool4u, 1.65 billion is chump change compared to what buying power Google has (according to this article, more then $10 Billion!). its just a little wierd to some people that it would cost that much for a website and company that hosts videos put on the site by ordinary people.

1010.10.2006 12:19

Don't forget the lawyer costs for when 8 yr old Suzy sings a Modonna tune into her hairbrush!

1110.10.2006 13:22

It's was all up to YouTube on the set price. They could've always said No to the 1.6 Bill who knows what the original offer on the table was or how long it took to settle on a price...

1210.10.2006 13:28

I am just worried, I realy hope YouTube dont change for the bad. I have many videos up there. Does anyone think that Google might rid the site of the videos it already has and start fresh? Not a likely possibility but maybe.

1310.10.2006 13:53

How does a website like that make that there money? I don't get it how can it be worth so much?

1410.10.2006 13:57

Advertizing adds a lot of bling to the pocket, then there's the share holders, the extra stuff that sold....who knows, but it adds up...

1510.10.2006 16:30

amazing... who couldve though youtube would get bough in price like that.

1610.10.2006 17:42

Personally; I don't like the fact that google has to buy out every damn company on the net these's like BluRay said---Google seems as if they want to own the whole damn internet:( Although; I do like the google search engine; I also know that google's video site compared to Youtube is CRAP!!! So; let's just hope that youtube stays the same it's always been; and that the thing that changes is that it's now run by a higher company;;;; ....To me though, this doesn't sound good....I wish YouTube would've stayed independant and kept slamming all the big internet kahunas on web traffic..... was great to finally see for once that in like a 2 year period that such a simple idea could make something grow to be monumental... A VERY FREQUENT youtube visitor; Halen5150

1710.10.2006 23:46

lol, you're all jealous... wait, so am I. $h*t YouTube sucks and it still makes tons of money. I wish I sucked that bad????

1811.10.2006 11:39

GooTube, with free Adwords & extra toolbar downloads, coming soon to your desktop. Mmmmmm crunchy :|

1911.10.2006 12:11

I only visit the site when I receive a link to a video hosted there.. It's a nice site, and I hope google helps maintain and improve its popularity.

2012.10.2006 1:44

Goodbye YouTube, it was nice knowing you!

2115.10.2006 3:45

Wish I could steal copyrighted content, put it up on a website (or let others put it up) and make millions in ad revenue, but it's illegal I thought.

2215.10.2006 13:19

Google paid the $1.65 billion price tag using Google stock, this then sent the Google stock price up,making Google a profit, so really they paid nothing for YouTube...what a deal I love this singer

2316.10.2006 16:06

Next thing you know, google is going to go after wikipedia even though you can't buy the damn thing. Google is turning into the digital manifestation of Microsoft. What happens if google and microsoft end up in bed?

2417.10.2006 8:05

Microgoogle or moogle or micoggle maybe even googlesoft.

2520.10.2006 21:37

lol, googlesoft

2622.10.2006 10:00

All it boils down to is: $$$$ M O N E Y

2727.9.2010 8:03

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