Google To Acquire YouTube for $1.65 Billion in Stock
"Google Inc. (NASDAQ: GOOG) announced today that it has agreed to acquire YouTube, the consumer media company for people to watch and share original videos through a Web experience, for $1.65 billion in a stock-for-stock transaction. Following the acquisition, YouTube will operate independently "

http://www.google.com/intl/en/press/pressrel/google_youtube.html

Holy crap!

digg it here :)-

http://digg.com/tech_deals/Google_buys_YouTube_3

just got the email from google.

Grrrm

*jaw drops*
I think I'm going to faint, Google buy YouTube? It was mentioned earlier but this soon? :-0

<<Webcast and Conference Call Information

The company will host a conference call and webcast at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) today to discuss the acquisition. To access the conference call, please dial 800-289-0572 domestic and 913-981-5543 internationally. A replay of the call will be available until midnight Monday, October 16 at 888-203-1112 domestically and 719-457-0820 internationally. Confirmation code for the replay is 2260624.

A live audio webcast of the conference call will be available at http://investor.google.com/webcast.html.>>>>

hmmm... i don't see the audio webcast yet..

*faints*

Will Google Improve the way YouTube plays videos?
At the Moment it plays as soon as there is anything to play, Google Video plays when it's got enough to reach the end in one go.

On the other hand all that copyrighted stuff that will dissapear off of YouTube...

/pd that is a duplicate digg. :D

there is already one on the front page. :)-

Google to buy YouTube for $1.65 billion
Search engine leader looks to bulk up in the lucrative online video market.
By Paul R. La Monica, CNNMoney.com editor at large
October 9 2006: 4:19 PM EDT
NEW YORK (CNNMoney.com) – Google, the Internet's leading search engine, announced Monday that it is buying popular online video site YouTube for $1.65 billion in stock.

YouTube, which was founded in February 2005, has quickly become the most well-known of several online video sites. More than 100 million videos, many of which are short videos created by the site's users, are downloaded a day on the site.

According to Internet research firm Hitwise, YouTube has about a 46 percent share of the online video market.

For Google (Charts), the purchase of YouTube gives the company the ability to tap into the potentially lucrative online video and social networking markets. Some analysts have criticized Google for relying too much on advertising tied to keyword searches.

The combination of Google and YouTube could further strengthen Google's dominance in online advertising, giving it an edge over rivals such as Yahoo! (Charts), Microsoft's (Charts) MSN and News Corp (Charts)., which owns the social networking site MySpace. Some analysts said Monday that Yahoo, Microsoft and News Corp. also had probably expressed interest in buying YouTube.

Reports of a deal first began to circulate on Friday. Shares of Google rose about 2 percent on the Nasdaq Monday after posting a similar gain on Friday.

Ehm okay...
Schmidt:
- Want to build new movie plattform
- One of many investmets in video

As a stock owner, I love to see another source for money (and I hope Google not only uses AdWords/AdSense, but also sells DVD – I know that would be competition with Apple or at least partnering) at Google, but as I use I scratch my head about the value and the way Google wants to go with this.

YEs, Brinke they wanted for after the Bell, before annoucing it.. wait till trading begins tomorrow :)_

webcast is up

http://investor.google.com/webcast.html

"Following the acquisition, YouTube will operate independently to preserve its successful brand and passionate community."

WTF ?

Wow what a waste of money. How many think tanks could they have started with that cash.

jesus.

Yu, I often read that Google could build its own YouTube with that money. But that still does not gurantee that it will have the same success and it will take very long to build that.

partnering myspace, buying youtube and serving ads to webmasters google's reach is nearly perfect now. you CANNOT escape them now. ;)

This seems to be one of the first Google acquisitions of something they already have in terms of technology (Google Video). So first Google Video is promoted to the frontpage, then they buy YouTube. Did they look at some of their stats and decide they get the best click through rates for ads are with video content or something? And do they want to plaster YouTube with ads now?

Bubble 2.0!

This is bad for the imternet..

I agree with you. Just didn't seem like their style. If i recall correctly they used to acquire small companies (a few people) and while they were still under the radar for nominal money. They also were able to acquire braintrust/ distinguished engineers from these smaller companies. A good example is the head of Neven. Or the head of the research in russia they now have. I am curious if Brin/Page were on agreement here. Or whether the board was consistent with their decision. Not that throwing money at things solves problems or makes you #1 (MS R&D spending is off the scale). But 1.65 billion in US dollars could have made alot of headway infrastructure/R&D wise in countries like india or china where the market is still growing rapidly. Much like the US was during the internet boom. Maybe they have theres a method to this so we will see over time. Those two paypal guys just cashed out , i doubt they will really care what happens now. Nothing innovative here so it can go just as easily as it came. Reminiscient of VC firms pumping money into firms in the late 90s, the owners of the companies just waiting to go public and then watching their company tank.

>>This seems to be one of the first Google acquisitions of something they already have in terms of technology (Google Video). So first Google Video is promoted to the frontpage, then they buy YouTube. Did they look at some of their stats and decide they get the best click through rates for ads are with video content or something? And do they want to plaster YouTube with ads now?

Like you said I guess Google noticed that Video wasn't as sticky as YouTube. So they bought it. And it's really interesting how YouTube will function as an "independent organisation"

holy crap!!!

and youtube has only been around for what – a year???

from the previous thread on this:
"You guys have to remember all the times that communities have been bought up by other providers and then people have fled the scene because they really don't like the new companies policies or their revisions. If google stays hands-off and uses the service as a revenue option"

damn good point. anyone remember the car crash/train wreck that was the MP3.com buyout? thats a perfect example of an active community simply moving elsewhere.

[Merged comment from other thread with this one – Tony]

I can't help thinking that they only bought them so that someone else didn't.

del.icio.us and FlickR uses didn't mind and they haven't gotten completely Yahoo(ey). I think Google is trying to preserve the YouTube the identity instead of scrapping the tech and content.

good point tony.

1. they prevented yahoo from buying them.
2. maybe the didn't wanted to buy the market leader but the biggest competitor for google video.

letting the brand youtube alive (die) makes sense tho...

Good point Tony, Now Yahoo and Microsoft will be forced to either buy others (if any) or forced to put more muscle into their respective ad services.

Do you people think Google, who is already partnered with News Corp, will try to strike a deal where youtube will be the video provider for Myspace?

No WAY! I hate Microsoft! Oh no, i mean Google!

I think it's a good buy.

If YouTube is integrated with Google Accounts, this will be one of the most popular ways for people to sign up to GAccounts. Therefore, they will then have access to every single other Google service.

<<And do they want to plaster YouTube with ads now?>>
There's already ads on youtube, just search for something, big picture ad above the results and another to the right. And one along the top of every video.

Now Google's bought it, I won't feel weird using Google Video's Competitor. Although Google now has two copies of my videos.

It's nice for Google to have the site but $1.65 Billion in stock?
Isn't that a lot even for them?

I'm off to make a video site.....

> There's already ads on youtube, just search for
> something, big picture ad above the results and
> another to the right

OK, so now that's gonna be Google ads soon, right, that's what I mean...

It won't! it will be a seperate thing from Google's services..
They only bought its shares, so to speak.. that's how that crap is..

LOL at Philipp!

As you commented above it is a first for Google to build and release a product in a space and then buy a (near) identical product, I just wonder how that can not seem like a digg at the GVid guys?

I liked the idea of the deal overall. I love YouTube for content, but prefer some of the layout and stuff of Google Video. I thought this would bring them together... but it appears not.

If you listen to the conference call, it says that YouTube is definately not going to have a name change, neither go through change of branding.

It will be totally separate from Google, by the looks of it.

Now, what will happen with Google Video?

Sam : No – it will bring about a new wave of content distribution.. Google has Video but not communiyt. YourTube has community but no heavy resources for S/w development and intergration.. Most people are looking at the tip of the iceberg and trying to make sense of this deal.. :)-

"The money is in organizing and distributing that content in a simple,
straightforward and respectable manner. As billions of people on this
planet come online and look to consume that content, Google's
positioned itself to be an agnostic distributor. Acquiring YouTube
makes tons of sense." – [snip source]

Wouldn't want to be working for Google Video just right now....why on earth would they want to keep it. It failed, that's why they needed You Tube. And all You Tube needs now is a real business model....though for 1.65 billion perhaps they had one all alone. Not bad for 18 months work.

Waxy.org links to reactions from the YouTube community:

http://www.youtube.com/video_response_view_all?v=o8tvNj_1Fr0
http://www.youtube.com/results?search_type=search_videos&search_query=google%20youtube&search_sort=video_date_uploaded&search_category=0

"Shares of Google gained $8.50 on news of the deal today, driving the company's market capitalization up by more than $2 billion. So at least for the day, Google made more than $400 million on this deal. "

http://www.forbes.com/2006/10/09/google-youtube-video-tech-ent_cx_rr_1009youtube.html?partner=yahootix

yeah with just a flick of their pen's – googles actually made $400M :)-

Dan Harple, you beat me to saying it. I agree. This seems like a horrible purchase, but I'd be interested to see what calculations they did behind the scenes to justify it. Remember, Google is very number oriented, so I'm sure they see a potential money maker.

Perhaps they have the economy of scale to get YouTube's costs below their revenue. Google already has many datacenters and purchases ungodly amounts of bandwidth, so they are probably able to host it for much cheaper than YouTube had been doing. However, if they move to Google software, they have to be careful to avoid pulling an Analytics :).

How many employees work for youtube?

What about youtube's legal nightmares.

IMHO, this is the beginning of the end of the Google, that we used to love. This is depressing and I never thought the day would come when Google would buy those companies.

I think it was a good purchase. It seems to me this will make advertisers even mroe inclined to use Google. Remember they have the biggest social networking site (Myspace) and now the biggest video site. Both are probably problematic or at least require different way of approach for advertising. Google now gets to figure out how best to serve the ads. Staying ahead of their competitors by improving their ad platform.

In addition I think Apple's new iTV said something about Google as a partner. This would, partnered with Apple, bring them into our living room. And Apple partnering with Google may even depend on whether Google has anything to offer. Now it defenatly does with YouTube.

Google is protecting itself and making advances at the same time here. I think it's better they did pony up the cash than not. Google said they were all about gambles and I'm sure nobody wants to see them phase out.

RC :
Google said youtube will remain the same and with the same employees. So no worry about that..
but it's really bad how they buyed their competitor like that, it means that we won't c any gd updates in Google Video OR Youtube anymore. We used to c one every week! now there will be no pressure for this from the managers :) ..
But honestly, for me, that's still the start of of the end of the Google that i used to love.

Another thought. Google should try to partner Youtube with Myspace. I think it would be beneficial to both companies. Not merge the communities but their services to one another. I'm starting to wonder whether we will see a very profitable partnership between the two sites or a war.

"Remember they have the biggest social networking site (Myspace)"

Google dont own Myspace – that was bought out by News Corporation.

asf: They already have!! Remember the deal with $900M with news corp. This means that google partners with myspace on the ad scenarion and in reverse they just may build in that Myspace community will have cross sharing of google service (Ytube)!!.

its a marriage made in heaven for content :)-

Justin, I know they don't own Myspace. But they have the advertising agreement with them. Google probably gets to play with all the data.

/pd: I hope so. It would be great for both News Corp and Google if they did allow them to merge. I hope News Corp agrees. If such a thing does happen it would be interesting to know the guildlines.

Oh. My. God. I wonder if Google will keep it named YouTube, or if they'll rename it to Google Video.

Jake. They will keep the name youtube.

For the person before who was asking about the number of employees: 67
Months in operation: 19

Google has aqquired YouTube. GooTube confirmed!
googlelogs.blogspot.com/2006/10/
google-has-aqquired-youtube-gootube.html

I dont see how this is good for consumers. When youtube was a independant, it could be more of a rogue company. The main reason I used youtube was for copyrighted videos (tv shows and the like). Now because google is such a large corporation, it will be reigned in and forced to act more responsibly.

Google bought this not because it couldn't build a video sharing site of its own, but because youtube already had a huge user base. The longer they waited before buying youtube, the more valuable youtube would become. And as someone said before, if they didn't buy it, someone else would.

It's a real shame. I like an internet full of many small companies. The net just got a little more boring today.

Thought this would be savvy year for Google Entertainment Inc...

But for now Google's keeping us entertained!!

Guess what would be the name ?

Google YouTube
Google Tube
Google Videos
Googe Tube
or any other ?

philip
>And do they want to plaster YouTube with ads now?

Yep, i think so they surely will.....Google Already launched Videos ads!

Google Video Ads + You tube videos = Great Profit.........

WOW~

I think it's gRRReat that Google bought YouTube!!! =op

I looove Google AND YouTube!

Sankar, I think it'll be:

YouTube
A Google property

or:

YouTube
powered by Google

Aka, no name change, but maybe a new tagline somewhere on the site :)

Microsoft Way of buying the Market

Isn't it time for Google to amend their 10 philosophies page now?

<<2. It's best to do one thing really, really well.

Google does search.>>
http://www.google.com/corporate/tenthings.html

(Maybe replace it with something like "Google is the internet. Get used to it.")

I see this as necessary in the goal of organizing all the worlds videos. YouTube has way more videos at their disposal than Google Video Does.

I think they may just connect the databases behind the scenes so that Google Video gets all Youtube's content. Then they'll use Google video to develop exciting search algroithms with speech recgonition, etc, etc.

I think we're going to see the mission of Google Video and YouTube start to diverge, slowly at first but gaining pace. Neither will die, they'll just adapt their target.

YouTube is going to be the place to find user generated content – mashups with video clips (thanks to all the new agreements), amateur videos, etc. Videos where the creator isn't interested in getting paid (but where other people – music copyright holders, etc. – will want to see protection / an upside).

GoogleVideo is going to move more towards commercial offerings, similar in some ways to iTunes. TV shows, movie trailers, professional content where monetisation for the producer is a serious consideration.

I'd expect to see more adds on the YouTube page, and more 'paid for' content and in-video-add-supported content on Google Video.

The real question is – how long until both properties are streaming their respective content via Apple's iVideo?

Credit must go to this story here for providing some good premonition to this impending deal: http://www.sda-india.com/sda_india/psecom,id,22,news,12335,site_layout,sdaindia,.html

sorry tubedgoog , but techcrunch got there first

they had the rumour the day before:

http://www.techcrunch.com/2006/10/06/completely-unsubstantiated-googleyoutube-rumor/

Yeah, TechCrunch nailed this one.

on the issue of you tube and google video's targets diverging, i'd tend to agree. i'd just like to add that google video already has a growing public service archive (historical video clips, lectures, etc) and i hope that this continues to be part of google video's mandate.

mark -> i see two distinct markets alright. google video's interface is really more aimed at sitting down and watching a documentary for an hour or so. YouTube has more of a quick fix, MTV vibe about it.

msg fr chad and steve

http://www.youtube.com/watch?v=QCVxQ_3Ejkg

To Philipp:

it can be Video related add on each video start or related sponsored ads by audio tags. So if a video contains words such as "marketing" Google can display text or video related advertising (either inside the video itself or besides it.

But the question of buying youTube remains on the community value and the channels growth.

Do not forget that Google was going to have a stock crash in the coming days and therefore it was best to buy youtube as soon as possible.(fox sony and other related medium).

Do not forget there is the Venice project (video related site) coming soon that can be owned and sponsored by eBay (Zennstrom skype and kazaa founder)

looking forward to the venice project – those skype hackers are *smart* folks.

[Sidebar Info Nuggut] –

"The U.S. Department of Justice has begun an informal antitrust inquiry of private-equity firms and their collaboration on leveraged buyouts, a person familiar with the matter said today. "
[..]
" ...firms have teamed up on $201 billion of acquisitions this year, compared with $31 billion in all of 2001, according to data compiled "

Now that google has bought youtube will we have to pay money for our membership. If they do then i know another website like youtube its called Chruchroll.com