Done deal, GooTube is go!

October 9, 2006

Well the deal is now done and the price rumoured at the end of last week turns out to have been accurate. The deal ended up being a $1.65bn stock swap. Kudos to Mike Arrington at Techcrunch for breaking the deal! Seems his informant must have been privy to the talks going on last week, this has to be one of the biggest scoops in blogging history!

So Google now owns YouTube, and it seems I wasn’t so far off the mark in my previous post on some of the reasoning behind the deal. They’ve secured the traffic and plan to integrate Google advertising into YouTube thereby monetizing something that seemed pretty difficult to monetize. YouTube will remain a brand in its own right, a good move in my opinion as it’s become a household name. It’s now off the market, Yahoo and others are going to have to move if they’re to stay in the game, this gives Google a significant slice of potential ad revenue and traffic to play with.

Mike at Techcrunch has an interesting angle on this from the Fox/MySpace point of view which rings true and could prove a hurdle for Google but I don’t think it will sour the deal. The potential of Google and YouTube working together is huge and the prospects for video sharing are exciting now these two are working together. I hope to see some changes quite quickly and new ideas being pushed to the fore.

In other video news, both Google and YouTube signed deals with music networks allowing them to distribute and thereby protect artists rights. Deals have been signed with CBS, Sony BMG and Warner Music. This could help stave off threats of legal action over copyright issues at least from these major labels. These deals also make for an exciting prospect for music fans as it should make accessing music from these labels a whole lot easier (and potentially cheaper) in the future.

Also today, has signed a deal with Microsoft to power the video searches on Live and MSN, so it seems everyone has gone video crazy today.

So is this deal reminiscent of the bubble factor coming into play yet again? Well, yes it is but I don’t feel it’s an overvaluation this time and I hope Google has a game plan in place to prove any doubters wrong and this proves a success. The making of millionaires (such as must have happened to many YouTube employees today) is why we all love the web and get so immersed in it. Deals like this can only be a good thing in my opinion as web companies prove again and again what powerhouses of information and entertainment they can become.


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