As predicted in my article The Data War, one of the big two has made a major move for the amazingly popular video site, YouTube. In a $1.65 billion deal, Google has purchased the public video sharing service, making its founders (who are in their 20s) very, very rich.
This deal also gives Google a pivotal coup in its competition with Microsoft and News Corp.
News Corp's MySpace, the number one social networking website in the world, moved away from YouTube's services this summer when it started its own video uploading and embedding service, indicating it was not looking to make a move on YouTube. Another possibility was for Microsoft to strike a deal and move toward video services on Facebook, with which Microsoft struck an advertising deal in August. Facebook is already one of the top Internet photograph sharing websites.
The billion dollar deal means Google sees great revenue possibilities in YouTube, as they were willing to pay a huge premium in making their largest acquisition in company history.
YouTube has risen to icon status in the Internet sub-culture, and its corporate status has been rising since inking content deals with CBS and Sony earlier.
Money remains the motivating factor. Google CEO, Eric Schmidt, said in a press conference that YouTube would be just the first in a "video revolution" and a series of investments Google would make in an effort to increase their attractiveness to potential investors.
What can you count on? Short, 10-second advertisements before video clips, more text-based advertising, and advertising targeted to video categories.
All in an effort to make money on what's free.
Article comments
1 - Ken Edwards
I just hope that Google does not destroy the YouTube interface. I really dislike the Google Video UI.
2 - John Guilfoil
We're ok as far as interface goes and the service will more than likely remain free. It's just going to mean more advertisements.