The New York Times reports that Google is “in discussions to acquire YouTube for $1.6 billion, people involved in the talks said yesterday.”
YouTube has definately become one of the biggest success stories on the Internet the last year, even the last couple of years: YouTube is “has yet to celebrate its first anniversary or its first profit” but already Google is trying to buy the video-sharing website for 1.6 billion dollars.
Other companies that have “expressed interest” in buying YouTube are Microsoft, Yahoo, Viacom and the News Corporation. As should be obvious, these companies could join in on the fun and offer even more for YouTube than Google has already done / push up the offers.
YouTube founder Chad Hurley, ruled out any take-over last month:
If YouTube agrees to a deal, it would be a sudden change of heart. Chad Hurley, a founder of the company, has said that he prefers to stay independent. “We’re not even thinking about being acquired or going public,” he said in a meeting with New York Times editors and reporters last month.
Analysts say that altough 1.6 billion dollars may sound as a terrible lot (which it, of course, is), it is quite reasonable. YouTube has a 46% share in the video market on the internet, while Google itself, for instance, has only 10%.
What made YouTube successful and what made video Google, well, not fail, but not as successful as anticipated?
“YouTube figured out what Google and Yahoo and Microsoft and all the others in the marketplace didn’t,” she said. “It’s not about the video. It’s about creating a community around the video.”
On of the main men behind this latest Internet frenzy you ask? Why, Rupert Murdoch of course:
The recent takeover frenzy is being fueled in part by the News Corporation’s acquisition of MySpace, a social networking site immensely popular among teenagers. The company, controlled by Rupert Murdoch, bought MySpace last year for $580 million in cash, and it is now worth as much as $2 billion by some analysts’ estimates.
Ka-ching!
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