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Main > Archives > 2006 > October > Google Gobbles Up YouTube for $1.6 BILLION

Monday, October 09, 2006

Google Gobbles Up YouTube for $1.6 BILLION

It's just about done. Google has made their biggest purchase in company history and bought up first year upstart YouTube.com for $1.65 Billion, all in Google stock.

Now I'm not going to go into all sorts of crazy details like the rest of the blogosphere will undoubtedly do, but I will make a few points and ask a few questions.

Google gives these two 20-something year olds $1.6 BILLION in Google stock. Now to put that into perspective you can take out the 30% that Sequia Capital owns and these two guys get to split up *que Dr. Evil* $1.1 BILLION DOLLARS. Imagine starting your current company a year ago and having someone buy it for over a BILLION dollars. I can't even imagine. Well, yes I can, if you have a spare $1.6 billion laying around, I can come up with something to sell.

I digress. Now this is an all stock deal so that $1.6 BILLION DOLLARS (saying that never gets old) could go up or *gasp* even down. For example. Let's say a meteor hits Moutain View, CA and Wall Street thinks that Sergey and Larry have perished under atmospheric rock, the Google stock tumbles, falling 25%. YouTube-Teens only get to split $825 million. I can barely hold the tears back.

Ok, so these two guys have $1.1B to split, they could buy MySpace, TWICE! For those who don't remember Fox bought MySpace.com just over a year ago for $580 million. A blockbuster deal at the time for sure, but that is less then ONE THIRD of what Google is paying for YouTube only a year later. Wow! is right.

There have been a lot of voices speaking out on this suspected but no one has been a bigger advocate of the 'Do Not Buy YouTube' theory then Mark Cuban. Cuban is the first among the blogosphere to put up his reactions to the acquisition and it doesn't disappoint
Mark Cuban states "It will be interesting to see what happens next and what happens in the copyright world. I still think Google Lawyers will be a busy, busy bunch. I dont think you can sue Google into oblivion, but as others have mentioned, if Google gets nailed one single time for copyright violation, there are going to be more shareholder lawsuits than doans has pills to go with the pile on copyright suits that follow."

It will be intersting to see how the rest of the blogosphere reacts, but we will probably have to wait until tomorrow for that.

By Matt O'Hern at 04:41 PM | Comments (2)

(2) Thoughts on Google Gobbles Up YouTube for $1.6 BILLION

Only in America can you build a brand on the PR you get from violating copyright and turn around and sell the company for that much money! Going just on emotion, $1.6 billion appears to be a gross over payment, but if you look at the future value of pay-per-click video advertising (which Google has been testing for quite some time) acquiring 100-million page views is a good deal for Google – and probably worth every penny.

Comments by Kevin Schaff : Friday, October 13, 2006 at 12:35 PM

I personally think that google made a great investment, now on the other hand the owners of youtube did not make a sound decision. Just like was said Google stocks can go up just like it can go down. I would like to wish them nothing but the best, because theres alot of us that would like to be in their shoes.

Comments by Alex Beevers : Wednesday, January 06, 2010 at 05:18 PM

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