Why YouTube is a good buy for Google?

So, after days of speculations Google finally announced its acquisition of YouTube today (Oct. 9 in the US).

I have only 3 points to consider why this buy-out is a good one for Google:

Google has the resources to relieve YouTube of its major operating costs – servers, storage and bandwidth. Google has tons and tons of it and by taking over YouTube, expect video streaming to be faster.
YouTube’s current monetization scheme primarily includes Google Adsense, so Google definitely knows how much YouTube is earning from it and its potential to draw more revenue and eyeballs. This gave Google the leverage to offer YouTube $1.65 billion since it knows how long it will be able to recover that amount.
Google needs to send shivers of excitement (again) to all its stockholders and that would help boost the market value in NasDaq. I reckon that with all this excitement, Google might just be able recover that $1.65B investment with a nudge in its stock prices.

So, who’s next? Digg?

Abe is the founder and Editor-in-Chief of YugaTech with over 20 years of experience in the technology industry. He is one of the pioneers of blogging in the country and considered by many as the Father of Tech Blogging in the Philippines. He is also a technology consultant, a tech columnist with several national publications, resource speaker and mentor/advisor to several start-up companies.

https://www.yugatech.com

18 Comments

kzap says:

19 years ago

because video streaming via flash is so fast :)
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Miguel says:

19 years ago

It’s not even streaming – just progressive download/playback.
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purelocke says:

19 years ago

You Tube always had that “unearthed” potential, and if Google is right, You Tube could be a miliking cow for ads….which I guess will be their model for it. What about Google Video? Will it integrate with You Tube….or will they keep it. Questions…questions…questions…!
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Jolo says:

19 years ago

Migs is right. It’s a progressive download. Youtube converts all the uploaded video files to .flv flash files.
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purelocke says:

19 years ago

Google primarily earns from ads, and You Tube’s traffic may just have been so tempting to them. But I still believe that they should have improved Google Videos instead of buying a company whose future was once foreseen as not so bright and profitable.
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purelocke says:

19 years ago

Well, here is my opinion:

http://purelocke.blogspot.com/2006/10/will-google-regret-buying-you-tube.html
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jayvee f says:

19 years ago

fools!! the next move is obvious…

Google buys A Bugged Life ;)
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Miguel says:

19 years ago

The G is just looking for more virtual real estate to paste their ads.
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SELaplana says:

19 years ago

this is just but one of the steps that Google took to attain its goal, that is, organizing the Google Technology.

Google has:
1. Photo site
2. Video site
3. Music site ?
4. Community site
5. Mail site
6. others…….
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Ang-ang says:

19 years ago

I love youtube but google video is also great! I think they should invest more to their video services (Google)
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