Google Buys YouTube for $1.65 Billion

When Google went public with its odd auction IPO, a great many believed it was merely a way to help its staff make their fortunes more liquid. Heaven knows the company didn’t need cash. Now, it has found something truly useful to buy with its billions, spending $1.65 billion on YouTube, the video website. An extremely powerful video “network” is aborning.

YouTube is a nifty not-so-little site that shows around 100 million videos a day to 72 million monthly visitors (making a bit bigger than the Kensington Review in the same way that Bill Gates is richer than Mother Teresa was). That’s a lot of eyeballs on screens, and Google understands that advertisers will pay to have their products on those screens. Just as the ads that appear to the right of this text comes from Google software, analysts expect the YouTube videos to have similar ads in place after the takeover.

Where the real threat to traditional broadcasters arises is in the synergy of the Google search engine and the video library that is YouTube. The ability to search for video content isn’t new; Altavista.com has had it for years. However, the fine-tuning of the search to fit the library that can occur as part of GoogleTube (or whatever they call it) has revolutionary potential.

The traditional media companies do get a short-term gain out of this. They have complained that YouTube shows video with pirated sound and such. Universal Music Group recently signed a distribution deal with YouTube to protect its rights, and now that Google is onboard, more will follow. They get access to a much larger audience and a piece of the action for doing essentially nothing more than agreeing to accept it.

As nice as that must be, they risk becoming captive to the video portal firms. Getting a “good spot” in a Google search is a major focus of more than a few companies. They spend a great deal of their time trying to figure out what they can do to move up to the first page. That demonstrates Google’s power, and for the media firms, not being in the driver’s sear will be a new and uncomfortable experience which might leave one or two permanently out of the picture.

© Copyright 2006 by The Kensington Review, Jeff Myhre, PhD, Editor. No part of this publication may be reproduced without written consent. Produced using Fedora Linux.

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