Do you guys think that Google acquiring YouTube is a good idea?  Is the
$1.6 billion price too steep?

It could be the best investment for Google or a flop. YouTube is a very
good site for video compare to Google video. Google has the money to
buy it and also the ability to distribute the video alot faster then
anyone.  Also it can control the lawsuit that will likely be coming
because of copyright.
Yeah, Google should just go ahead with this, up to $2 billion.

But where are the profit increases from buying YouTube ???

Is it really such a good platform for advertising??
Is it worth all that extra management and support?
Is it really worth $1.6 billion?

Why not focus one tenth of that money on a marketing strategy to
promote
Googles video? Get a funky name like Googtube.... or something.

Just because Youtube is popular now doesn't mean it can't fall to
another video search.

Buying out YouTube sounds a bit lazy and un-creative.

YHOO or MSFT buying YouTube could let either back in the game.  Slam
the door shut, Eric!!!

This isn't worth the bandwidth costs. I don't think the advertising
profits could catch up to them.

Plus, Google Video.

So what are they buying, video market share? They should just step up
advertising on their current product.

Where is the profit in video, you asked? How about $500 Billions in ad
spent a year, mostly  in TV that you can not search. If Google can get
1/10th of that money; I am getting dizzy thinking out this.

I think its a great idea. Maybe its time to change gears from
purchasing start ups with yet to be seen success to purchasing tried
and successful services such as YouTube.

I think this will put a end to the "One trick pony" complaints from
Wall St. If your pony has one great trick, and several in development..
buy a second good one to shut up the critics ;)

This is just rumor, why so many people are so into it?

T, take a chair and chill out.  And chill some champagne while you're
at it... lots of it! :)

T, take a chair and chill out.  And chill some champagne while you're
at it! :)

I absolutely agree,  How will they make back 1.6billion+ ?   The only
reason I can see Google buying YouTube is to put it out of business,
and perhaps keep it out of MSFT's hands.

GoogTube sounds brilliant btw ;)

The combined market share of Google Video and YouTube will give GOOG >
60% share of the video market and the consolidation is likely to drive
even more share Google's way.  From a valuation standpoint, goog is
paying almost $1 Billion to Myspace and the traffic is of a similar
nature (i.e., similar demographic, very generic).  Compared to the
Myspace deal, this is a bargain.

Look at it this way, at 100 Million videos viewed daily, if they get a
1% click-thru-rate at .50 cents a click from their AdWords program,
they stand to generate $182 Million annually just from AdWords.  This
is before you factor in content deals, distributing videos through
AdSense, etc.  Just AdWords revenue alone could mean they are
purchasing at a P/E of 9...not too shabby.

My Two Cents.

Positives:

(1) People already go there.
(2) A LOT of people use it.
(3) The product is great for the user.
(4) The brand "Youtube" is favorable and has goodwill

Negative:

(1) The content belongs to someone else...to be decided by the courts.
(2) This is like buying Napster..6 years ago.
(3) The best content is too low-brow for Google.

My vote is for NOT buying it and working with Viacom, GE-NBC, and the
others to produce a legal and home controlled Google-Video. I would
rather pay 1.6 B for the content not the brand.

Positions GOOG to become leader in video advertising... and video
distribution.

GOOG has the clout and money to hammer out the copyright issues.

MSFT loses out again.

JGV1, you make some good points.  One thing to keep in mind is that you
can't get the "big deals" if you don't have the big traffic, especially
if you're trying to lock a content providor into a multi-year exclusive
arrangement.

As for "low-brow", I don't really think it matters as long as there are
positive commercial implications for Google.  If I'm an owner of Google
stock, I don't care what garbage you want to watch on GoogTube as long
as you're clicking on some Adwords along the way.

Another point to keep in mind...cost.  By leveraging Google's economy
of scale and existing infrastructure, investors are seeing more
effective use of capital.  All that dark fiber doesn't do much if there
isn't something to send over it.

I think it's an excellent idea, as it:
a) increases traffic to google and it's products (once they integrate
it with google)
b) makes google known to more people as an "entertainment king" (which
it isn't right now)
c) grants google LOTS of original content that it can advertize on and
make back $

That's what I think. :)

Roman

YouTube currently has only 70 million videos viewed daily and that
realistically is
viewed by only 23 million people as most people hang on YouTube and
watch say 3 videos.

assuming a 1% click-thru-rate they stand to generate $41,975,000
annually and that is before all the costs of maintaining and managing
YouTube.

Assuming decent growth of YouTube under Google ownership it would still
take something like 10 years to pay of the $1.6 billion investment,
down from the 40 years at current figures.

In the meantime, its early times for video over the internet and who
knows what knew sites will pop up with the potential to win over
market. YouTube is exposed to the dynamic nature of the internet while
having to wait 10 years to see profits.

Unless Google has some very creative idea on what to do with YouTube in
terms of expanding the economy around it, which may be the case, I
still think that it is better to work on and promote thier own video
search.

Roman

YouTube currently has only 70 million videos viewed daily and that
realistically is
viewed by only 23 million people as most people hang on YouTube and
watch say 3 videos.

assuming a 1% click-thru-rate they stand to generate $41,975,000
annually and that is before all the costs of maintaining and managing
YouTube.

Assuming decent growth of YouTube under Google ownership it would still
take something like 10 years to pay of the $1.6 billion investment,
down from the 40 years at current figures.

In the meantime, its early times for video over the internet and who
knows what knew sites will pop up with the potential to win over
market. YouTube is exposed to the dynamic nature of the internet while
having to wait 10 years to see profits.

Unless Google has some very creative idea on what to do with YouTube in
terms of expanding the economy around it, which may be the case, I
still think that it is better to work on and promote thier own video
search.

u think microsoft will buy yahoo any time soon!