Oct 11, 2006
Two friends asked me when i would post on this, so i guess this is the post they were waiting for.
Google is now the owner of YouTube after paying 1650 million dollars in Stock, wich means that after that YouTube Founders were converted into Google Stockholder unless they sell all their stock right away wich is not something common but could Happen.
The Reasoning Behind It
Many people thought that Google didn´t needed to buy YouTube.
They are WRONG.
Google Video was a complete failue to Google eyes because they were not even in third place on the online video crowd, they were in the fourth place.
Now, many of you would say that the Fourth Place it´s not such a Bad Place to be, but to google that were investing a lot of effort in their Google Video branch, this was unacceptable.
Well, maybe becuase Google Video was the second Video on the web just after YouTube, then why it is not at second place now?, why it got passed away by Yahoo that got launched later and MySpace Video that was not that long ago from being launched!?, How can that be?
Simple, Google Video SUCKS big time.
Yeah you heard me, and am not talking about the quality of the service of the embed windows or how it streams.
i am talking about that it didn´t had no structure at all, their social features were launched later and in a way that made you wish they didn´t have bothered to do it.
It has a lot of power but not a bit of structure, it don´t feels like a brand, like a community, like a service, it don´t feels like anything.
A personal Ning Video Page has more identity that the entire google video branch.
They realized that.
And then you got the competition that is killing them becuase their act cannot pull itself together.
Other reasons are:
Yahoo Video barely heating up, and Yahoo has a long term "Media Center Online" plan that has Yahoo Video as one of their main pillars wich is why they also bought Jumpcut, that is a online service to edit videos on the go, this will allow them to improve not only their Video branch but their whole media center idea.
MySpace Video was launched as a sure bet from the board members after checking out the numbers of YouTube windows playing inside MySpace, they saw big money and a way to reach even more people with whatever they can plan.
They launch it, and to the surprise of no one it turns into a phenomenom in it´s own right considering how new it its to their counterparts, they passed over Google video without breaking a sweat, Google notices this,and see they are no longer in the podium.
Then we got the late adopter that don´t cares it is the late adopter becuase they ARE the biggest entity there is: enters Microsoft own Soapbox initiative.
There was such a rush in the Blogosphere to disminish Microsft saying it was to late for them.
They are also WRONG.
Microsoft has the Biggest HubBlog platform in terms of reach with Live Spaces, they launched SoapBox as a MSN brand and not a Live brand becuase it was considered best to push it in a more Global way, considering the deals they got all over the world that ties the MSN brand.
In mexico for example Telmex (the biggest corporation in mexico that forbes has it above donald trump and even murdoch`s in the list) has a very close deal with Microsoft in several branches assuring MS total supremacy in Mexico and Latinoamerica thanks to the influence of the corporate group in it.
Then they are going to tie sopabox to msn groups and other yet to be named Live Initiatives along with also unknown Zune and Xbox integrations.
Oh, and i mentioned that WM12 is going to tie direcly to it or that MTV is going to get into the SoapBox bandwagon in their partnered MS deals?..
Yeah, that how you get to see the big picture here.. SoapBox is going to be a success becuase MS has the pull to lure everyone into it in one way or another.
And after being in Soapbox for two weeks(i am in every single MS initiave Betas) just using youtube or google video makes me shivers when i compare it to the ease of use Soapbox has.
(i will do a post on it too, don´t worry)
So, if after reading all this, you don´t see why they needed YouTube, then you must re-read this post.
Yeah, it a very step price, in real terms, i don´t think that YouTube is worth more than 500 millions, but the value in this case was not really about it being actually worth 1650 millions for what it truly is, but the worth was measured in how many people wanted to buy it!
the interest was everywhere, just from what was left in the open, even viacom wanted it.
So, if you got Yahoo, viacom and presumely other 2 unamed parties wanting it without even mentioning Google, then it is not a sale, it is a auction, so it don´t matters that it´s true price is 500 million dollars, if people are offering more and more it will then be bought by the most desperated party in that bidding war, and that was google.
Yahoo, has deeper pockets than Google but they are not desperated, they are at #2 and their only reason to want it was that google wanted it.
What it´s going to happen to YouTube
They could combine the best ideas of the two platforms, but this was already done by Soapbox, and the whole idea of buying it was to buy the marketshare and mark a step difference for the others to follow. so who knows what they plan on it.
Where is the Blogger Angle in this?
Well, what Google coould do now is fusion their both libraries into one, and then concentrate into improve the technology and it´s use, i would love to see google offering videoblogging integration for Blogger, and after this deal, they are in the place to do it, it also put them in a place where they can get a video partnership with apple focused on the social model and what i think is the more important angle for google to have snatched YouTube:
Adsense, a new boost to their video search and that they will be able to continue experimineting with their video adsense..so it truly gets full circle there. they get more content to search and push adsense and new ways to do it.that is where Google makes it´s money
So,, for me i am happy this happened, becuase it means the market will need to try even harder, and i can forsee other buyouts more focused in video flash technology and advertising synergy.
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