Monday, October 09, 2006

Google Buys YouTube For $1,650,000,000. Why?

It's official: Google has announced plans to buy YouTube for 1.65 billion in stock.

It is difficult to predict what this move will mean. Google's interface for browsing, sharing, and networking videos has been poor from the start, and YouTube has always had a safe harbor attitude towards copyrights. Google can certainly adopt many of YouTube's user interface features, but do they care? They could have done this already, easily, for free, and didn't. Google has also had a slow start in finding user-generated content; they're certainly buying plenty of that here, but YouTube needed to be bought because the company was a sitting duck for lawsuits and it needed a rescuer. The only way Google can rescue YouTube is by stripping out a lot of that illegal content and setting up stronger restrictions on uploads.

Good reads so far:
Blog Maverick (Mark Cuban eats crow)
Thomas Hawk
Google's Announcement
Ars Technica's pre-deal prognostication (thumbing its nose at TechCrunch's scoop)


Kenji said...

why? because google's business is indexing. They need content to index. So they can add ads sensitive to the context...

Jeremiah McNichols said...

A good browseable interface is what Google needs to keep viewers on its "video" pages. I thought of that as the only way to market text ads to viewers, but if tagging video content would allow them to add content sensitive ads to sites that "share" their content via websites and blogs - a big factor in YouTube's success - then I guess you are right.

YouTube has put a lot of work into developing and extending their users' experience through their various categories, ranking systems, and post-viewing suggestions, all very fluid and engaging. But again, there's no reason why Google couldn't have just copied these strategies.

I think Google realizes they missed a huge opportunity when Yahoo snapped up Flickr and they are now trying not to miss the boat on digital video in competition with Yahoo, Microsoft, or whoever else might step in. Their own content stream has been extremely top-down and they are improving even that with attempts at selling more top-down content from TV networks. I don't think they needed YouTube for that - users' eyes will flow to wherever the content is that they want to watch.

Now they are looking to transplant a user community who will upload content so they can tag it instead of letting YouTube do it, and then they can try to sell things from the sidebar while the kids watch the homemade videos? It seems to me that in-video advertising captures a lot more eyeballs - you know, the old-fashioned solutions like product placement, sponsorship, or forcing ads on viewers prior to, during, or after content. And this has nothing to do with indexing!