* UPDATED *
Rumours of Google buying YouTube first reported by TechCrunch have been apparently confirmed by a story in the Washington Post just now:
Google Inc. is in talks to acquire popular video-sharing site YouTube Inc. for roughly $1.6 billion, according to a person familiar with the matter. The discussions are still at a sensitive stage and could well break off, this person says.
A spokeswoman for YouTube could not be reached for comment. A Google spokesman said, “We don’t comment on rumors and speculation.” Rumors of such talks were reported earlier on the TechCrunch blog.
It would be a great deal both sides. YouTube belongs with a company that understands networks, not a media company still thinking in terms of channels and audience share. It also needs strong partners and deals to head off threats from the likes of MySpace Video, which has made a real impact by mimicking the simplicity and the usefulness of YouTube’s features (see Viral Video Charts top 25 videos and there are often as many MySpace as YouTube videos scoring lots of “buzz”).
Google on the other hand needs to stake a better claim to video on the web than its current offering, Google Video. And the massive user base of YouTube would be a great growth opportunity for its sponsored ads service, AdSense.
* * Update * *
Jason Calacanis has some more reasons that the deal would be a great idea…
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