Google Buys YouTube Video Site
Google shocked the online world this weekend with its acquisition of leading video site YouTube for $1.65 billion in Google stock. YouTube will maintain its brand and site, and move into its new San Bruno offices this week as planned. Hitwise estimates YouTube’s market share in September at 46%, an even stronger share in Europe. Google Video had an estimated market share of 11% in the same period.
The $1.65 billion acquisition places YouTube at about the same purchase price adjusted for inflation as eBay’s acquisition of PayPal in 2002 for $1.5 billion. I’m sure the similarities are not lost on the founders and board members formerly of PayPal. I think the acquisition price is absolutely nuts.
While Google Video has been a popular destination for copyrighted videos such as NBA basketball or Nickelodeon cartoons YouTube has become the hub for all things video. Users create videos specifically for videos and its audience and publishers cross-post their work just to tap into the sheer volume of YouTube watchers. The most popular videos from other sites often make their way to YouTube, including copyrighted works such as Daily Show clips or the latest soccer highlights.
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