Google acquires YouTube – Read the complete coverage

So finally Google and YouTube have decided to get cozy.
YouTube (which actually gets 4 times more traffic than Google’s video) has been acquired for $1.65bn (all in stock transaction) and this marks a very stiff competition for Yahoo and MSN in the online video market.

Read the press release here. Listen to the conference call recordings here.

Let’s go back in past and see what have people talked about the Google/YouTube acquisition:

  • Mark Cuban thinks that ‘Only a moron would buy YouTube’ (link) – His logic? YouTube reminds him of Napster – very prone to copyright infringement attacks.
  • After the rumors of Google/YouTube marriage (first by Techcrunch and then almost confirmed by Wall street journal), Mark went a bit soft.

    “Its not the big companies they would have to worry about the most. Its the little guy. Youtube would get sued by the thousands of rights holders who will seek the maximum amount per download from Youtube for their content.This is where Youtube is really screwed. YouTube doesn’t stream. They use progressive download. So the damage claims are going to be per download and enormous. As I have said many times, that shit ain’t gonna fly. I don’t think so, and neither does a long, long list of copyright owners. We aren’t just talking big media companies. We are talking fake a lawsuit companies.

  • Now that YouTube has been acquired, Mark Cuban still sticks to his point.

    “Am I suprised, by the Google YT deal. Yes. Does it open up a whole new world if they go liability free ?You have no idea.”

  • Even Om Malik sided with Mark Cuban (“Cuban is not crazy“) and agreed that “Goog should resist falling for the chimera of traffic stats and millions of videos watched”. Now he is ready to lose 40 pounds.

    “So if you are making plans to meet me for a drink – not going to happen. Given that how wrong I was on this one, you should not really read any further.”

He has really got emotional about his anti-GoogTube agenda! 🙂

We promise this is our last Google-YouTube post for the foreseeable future.”

  • Shoemoney in his earlier post blasted Mark Cuban

    “Has this guy done anything ever that actually made money ? Ohhh ya he sold a domain name to Yahoo. (broadcast.com) Which from what I have read he fell into that deal (although reaping tons of cash from it).”

And who makes the most out of this deal?

  • Founders (Steve, Chad, and Jawed): $200 million each (atleast)
  • Sequoia Capital (YouTube’s investors) invested $11.5 million and will get back $495 million!

Now that the marriage is done, lets see how it affects YouTube partners – most significantly being Limelight Networks, their content delivery partner (YouTube videos aren’t delivered by YouTube, but by LimeLight Networks).

Limelight’s monthly revenue is close to $4 million, out of which YouTube contributes $1 mn. (i.e. 25%). Now that Google has acquired YouTube, will they stick to Limelight or switch to their own network? Even Mark Cuban mentions that

“It will be interesting to see if Youtube moves their videos over to Googles Data Centers. Google is a centralized datacenter with peering from what I can tell. Completely different than what the CDN networks do. Will that set a new trend ? It makes bandwidth much cheaper as others have pointed out”

Will the combined entity keep the lawyers busy (copyright violation/adsense..?).

Also, it would be interesting to watch the reaction from newly launched video sharing sites: Amazon’s Unbox, MSN’s SoapBox and of course Yahoo (it’s reported that Y! also bid for YouTube, but was outbidded by Google).

While Google is acquiring Tubes, Microsoft has partnered with Blinkx to strengthen its video search service for MSN/Live.com.

Stay tuned in for more on Goog-YT deal.

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