Google to aquire YouTube for $1.6 billion

October 10th, 2006

Well, the rumours circulating the internet were true - Google will acquire YouTube for $1.6 billion in Google stock. That’s an impressive price tag for a website that is widely reported as losing massive amounts of money every month due to a bandwidth bill of over $1 million a month.

So the Web(2.0?) welcomes it’s newest self made millionaires, Chad and Steve, who are understandably very happy chaps indeed.

Mark Cuban, a dot-com veteran and billionaire, said only a moron would buy YouTube - because all the copyrighted content makes it a juicy target for a copyright infringement lawsuit from the music or film industries. Somehow however I don’t feel that would have put Google off too much - they’ve become pretty experienced at shrugging off that sort of thing..

Update

Well, Mark Cuban still thinks they’re crazy, and Cnet sit on the fence, but make references to the dot-com bubble in the late 90’s where investors went mad buying ‘eyeball’ sites with no regard to profitability. I think that Google have made a good purchase if they want to dominate video online, although I find it interesting that they are planning to keep the two services separate - it’s the first significant brand management outside the ‘Google’ banner that the silicone valley giant have undertaken, and it’ll be worth keeping an eye on what they do to further monetise the online video market.