The Media Column YouTube goes Goo goo14/15-10-2006
Rupert Murdoch, Viacom and Yahoo!, you can put your cheque books away. Google finally snapped up YouTube this week, ending weeks of speculation over who was going to buy the online video website, and sparking off more speculation about the implications. The financiers see this as a sign of a Second Dotcom Boom. $1.6billion is a lot of money (or at least, stock) for a site famous for videos of people's pets, badly executed Jackass-style stunts and copyright-infringing TV broadcasts. Is this the time to invest in technology companies, they ask, as other start-ups get swept up? Or is it time to sell, sell, sell, as the bubble prepares to burst? A clue to the answer may lie in the fact that, when news of the deal was released, Google stock went up so much the company instantly made over $400m, which isn't bad for a day's work. The lawyers see this as a lawsuit windfall - the fact that YouTube was riddled with copyright issues was of less interest when it was a company that wasn't making any profit. But now that Google are the owners - and Google reportedly have billions in the bank - those copyright issues will suddenly seem very important. Google are cannier than that, however, and at the same time as the deal was being made, the companies announced revenue-sharing deals with the likes of CBS, Sony BMG, Universal and Warner. It won't scare off the sharks completely, but they'll have something to chew on for now. Media executives, meanwhile, will see this as a much-feared incursion into their territory. Before now Google could pretend it was ‘just' a technology company - even when it launched Google Video - but buying YouTube signals a move into content distribution, and reports suggest the acquisition is part of a broader strategy to invest in the emerging online video market. For a start, it positions the company against MySpace, YouTube's biggest rivals and Murdoch's latest plaything. The fact that Google made a $900m advertising deal with MySpace earlier this year only thickens the plot. This week the Google chief executive and Rupert Murdoch will meet to “discuss new ways of working together”. Read into that what you will. And finally, some users of YouTube - those young people filming their own Jackass stunts, pets, and favourite TV shows - see this as a sell-out; making money off the back of ‘their' content. But no one will be listening to them. In short, the story has more angles than a dodecahedron, and the best minds in the business are still trying to figure out the implications. The best analysis I've seen all week? Blogger Susan Mernit, who points out that Google could have bought the New York Times Company for the same amount. News organisations take note: the audience is taking over. Useful links: YouTubers to Google: Now What?MySpace wants to expand relationship with GoogleYouTube 2.0Copyright key to Google-YouTube dealGoogle Sees New Video Investments Beyond YouTubeThe vision thingParadigm shift: What Google didn't buy
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