GooTube is a Done Deal

Remarkable, it’s a done deal. Google has bought YouTube for $1.65-billion in stock. YouTube will operate as a wholly-owned subsidiary.

This had to have been a tough deal to bring off under all the scrutiny and leaks, so huge kudos to Google for completing the deal, as well as for keeping it from turning into an auction. Congrats also to Sequoia and Chad et al., at YouTube.

For myself, I feel vindicated for taking the view that YouTube skeptics were wrongheaded on this one. They overestimated the copyright complications, and they underestimated the value of this lovely piece of inventory for Google. It is ideally suited to the company’s AdSense technology.

Finally, and more broadly, this is going to have a lot of investment bankers flogging a lot of video companies. Revver, Veoh, etc., etc., are going to be deemed “in play”, and Yahoo/Microsoft/Fox and so on are going to be the focus of a great deal of selling attention. It will be interesting to watch to see how well they withstand the temptation to “get themselves a YouTube”.

Related posts:

  1. The GooTube Rumor Thing
  2. Google-YouTube Deal Today?
  3. The YouTube Warner Deal
  4. Google’s Deal with Stanford
  5. Ding-Dong, the Deal Flow Model is Dead

Comments

  1. Paul, I was skeptical of a YT IPO and still believe that would not have been possible.
    Google, on the other hand, provides YT with the necessary muscle, ability and credibility to partner with media giants. I wouldn’t be surprised if Google hadn’t already spoken with some of them prior to approaching YT and would bet on seeing some significant announcements over the next 90 days or so.
    Thoughts??
    Best,
    George

  2. Paul, you probably already knew this but it is Thanksgiving up here in Canada and I didn’t catch this earlier. Specifically, Om reports on his blog as follows:
    “In addition to their reported “marathon negotiations over the weekend,” YouTube and Google were also working in parallel on the content licensing front, with announcements today that YouTube had signed the recalcitrant Universal11, as well as Sony BMG12 and CBS13, while Google had picked up Sony and Warner Music Group14 (with whom YouTube already has a deal15). The deals mainly allow legal use of labels’ music and music video content.”
    For those that haven’t read the press releases, you can find them here:
    http://www.marketwire.com/mw/release_html_b1?release_id=170449 (Universal)
    http://www.marketwire.com/mw/release_html_b1?release_id=170475 (Sony BMG)
    http://www.marketwire.com/mw/release_html_b1?release_id=170474 (CBS)
    http://today.reuters.com/news/articlenews.aspx?type=businessNews&storyID=2006-10-09T132325Z_01_WEN6641_RTRUKOC_0_US-MEDIA-GOOGLE-SONYBMG.xml&WTmodLoc=NewsHome-C3-businessNews-3 (Sony and Warner)
    The press releases themselves are very exciting b/c each of the partners will provide YT users with an ability to use licensed content to produce their own content for upload onto YT.
    Very exciting times.
    Best,
    George