Google buys YouTube... sigh
Newest rich kids on the block to strike gold with a web start up: Chad and Steve.
Chad and Steve are the co-founders of YouTube. YouTube was founded in late 2005, and took off as a hit. A service hadn't been built quite like YouTube had, and the ease that users found to upload and share their videos awed many.
The service boomed, and soon YouTube achieved the official seal of approval: A copyright lawsuit. After several court battles, YouTube put in place restrictions, and began removing movies from their site that infringed on copyright (mostly Warner Bros. tender). As it hits world media, users from all reaches of life, not only the geeks and Family Guy fans, began uploading and sharing items and contributing to the YouTube community.
Estimates put YouTube's monthly expenditure at $1 million US. Their income is advertisement-based. How it survived for so long is beyond me.
And now Google has purchased YouTube for a whopping $1.65 billion US in Google stock (which in the future, if market trends continue as they have been, could be worth a lot more than 1.65b). So, Chand and Steve have struck it rich now, yet what could possibly possess Google to buy YouTube?
As I said before, it's beyond me that a company with an advertisement-based business model could even be breaking even. So why would Google buy an unprofitable business? Is it because they're generous ("Don't be evil")? No, it isn't. Google is a business, so they need to make money still. So there is only one reason I can think of that would make Google buy YouTube, and that is so they would own the majority of videos that are going onto the website. Now that Google has purchased YouTube, Google has almost a monopoly over the videos that are being distributed and shared via websites (this excludes bittorrent, because the video isn't distributed via websites, only the torrent is).
So now, with Google's business model (which clearly is successful at generating revenue Google stock on MSN), and their near-monopoly over Internet videos, can probably make some good money from this.
So we'll see how it goes in the next couple of months following the trade off.
(Interesting: In Diggnation #57, they discuss YouTube being bought. Kevin Rose says "Google... doesn't care. They have their own thing, they're doing just fine").
