Google snaps up YouTube for $1.65bn

Google / YouTube logos

Google has gained the top prize in the consolidation battle of the video sharing and social networking sites, confirming the acquisition of YouTube for $1.65bn in shares. Google said YouTube's co-founders Chad Hurley and Steve Chen would remain at the firm, which would be operated independently "so as to preserve its successful brand and passionate community".

Addressing YouTube's army of registered users—fittingly, in a short YouTube video—Hurley said the deal brought together "the king of search and the king of video". But not everyone was celebrating. "I think they should send us $10 for every video that we've uploaded," was one response to Hurley and Chen's jubilant report.

Some observers consider YouTube represents the future of television, with programmes distributed via the internet by an increasing number of 'Big Media' content owners and shared by viewers. Among them is musician, record producer and artist Brian Eno, who said last week: "A couple of hours on YouTube will show you more ideas for the future of televison than a couple of weeks watching television will."

Others point to the vast amount of illegally copied and uploaded material on YouTube—remove that and the site risks losing its quirky appeal among teens and young adults.

Google and YouTube said their priority now was "providing a better, more comprehensive experience for users interested in uploading, watching and sharing videos".

The fact that Google had to acquire YouTube speaks volumes for its own video search and share efforts. Google Video only allowed users to search still thumbnails of TV shows when it first launched in January 2005, a month before YouTube was founded. Partnerships with content owners followed, and a year later Google launched its video store—a response to Apple's iTunes Music Store that signed deals with video content owners.

Google CEO Eric Schmidt said: "The YouTube team has built an exciting and powerful media platform that complements Google's mission to organise the world's information and make it universally accessible and useful.

"Our companies share similar values; we both always put our users first and are committed to innovating to improve their experience. Together, we are natural partners to offer a compelling media entertainment service to users, content owners and advertisers."

YouTube currently delivers more than 100m video views every day with 65,000 new videos uploaded daily.

Lovelace Consulting  |  10.10.2006

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