Goo-Tube The Most Important Internet Acquisition of the Decade

It’s official. Google has acquired YouTube for $1.65 Billion in stock.

The Google YouTube deal will go down as the most important Internet acquisition of the decade. It’s a brilliant move by Google that positions them as the dominant player in digital video distribution.

Shoemoney did a great writeup on why the Google YouTube deal makes sense before the deal was final. He got hosed from the front page of digg (had way more than enough digs but didn’t pass the editors = lame).

Some people think this buyout is a sign we are in a bubble. While most VC money is foolishly invested in piss poor Internet businesses, YouTube is a bargin for Google at $1.65 billion. Plus Google bought the company in stock. As I write this, Google’s Stock is up 4 points (or a market cap of $1.2 Billion). That means the deal is already almost a wash (it cost Google NOTHING) and they have become the undisputed leader in digital video distribution on the Internet.

“But Quads – How Are they Going to monetize it?” Please. It’s not even about the fact that they could probably make the money back in 6 years with adsense alone. It’s about paid content syndication and (more importantly) paid interactive product placement. We have not even scratched the surface of what digital video advertisement will look like in 10 years. Mark my words, it will be Bigger than Adsense and Google just made the purchase of the decade.

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5 Responses to “Goo-Tube The Most Important Internet Acquisition of the Decade”

  1. BobArdKor says:

    It’s funny I was precisely reading before your post, and ready to say quite the same thing : someone comments there that Google gained 2,02% (source: ‘la Tribune’) and was valuated at 128 billion $ before the operation, thus gaining 2.58 billion $

    I have very poor knowledge of trade market and stocks and all this stuff, but one way of the other (if someone can sort it out… 2.58 billion ? 1.2 billion ?), google certainly did not “loose” 1.65 billion $

    Nice to read in here what i was just thinking.. ^^

  2. MrPenn says:

    I don’t really see why everyone is so shocked.

    1) They test ads in syndicated Viacom shorts
    2) They do well
    3) They buy YouTube
    4) They put short ads in YouTube
    5) They make another shit load of money
    6) They build their space elevator
    7) They rule the world

  3. mootion says:

    As usual, buying a company has *some* risk; but I feel it has lots of benefits for Google:

    1) They own their #1 competitor for Google Video.
    2) They don’t have to share AdSense revenue with YouTube anymore. As a division, they’ll get their own budget without disturbing AdSense revenues.
    3) YouTube won’t be able to switch to another Ad provider, like YPN or MSN.
    4) Installed Base: billions of posts shared videos on the internet are a good billboard for more adSense selling.
    5) “Average users” inside: People don’t use Google Video for uploading. Corporations use it for selling.
    6) “Average users” may use GooTube for Adsense video advertising (future product integration) ???

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