« YouTube content deals a huge win | Main | Office 2.0 = free online collaboration »

October 09, 2006


Chris D

I've been following YouTube for some time now and this is an interesting turn. The acquisition - while overpriced IMHO - solves many problems:

1) Google is already suitably built out on the back-end which solves the hosting/bandwidth of YouTube. They also can use their negotiation leverage to keep the bandwidth price as low as possible. The additional YouTube traffic is probably not as big of a problem compared to the scenario where YouTube gets bought out by - say - a major media company.

2) YouTube has not stuck me as a technology company. They are basically an integrator and an application UI designer/dev shop. Mind you, I think they did a good job on those two things, but I didn't see anything "deep" in their products. Google's big R&D braintrust will be complementary to YouTube application-layer strengths.

3) Obviously, Google has the advertising network/personnell in place that YouTube needs.

The jury is still out for me regarding Copyright Liabilities. I can imagine that several media companies will not take this acquisition lightly, so it'll be interesting to see if they take a more sharper approach.

One thing that I *do* hope is that all of this YouTube-mania in the press stops - for at least awhile. I can't help but think that there was some manipulation (directly or indirectly) of the press to get as much coverage as they did.

However, I think this is just the first round of a long and protracted phase of internet video related companies. Although there have been internet video companies since '98, we may have finally gotten over the "hump" and some serious traction will begin. I'm sure there will be yet another wave of VC dollars into this section now that there has been a *huge* exit (albeit stock only).

Let the games begin!

Robert Scoble

Microsoft will spend more than $1.6 billion trying to build a brand and community like what YouTube has.

Doing that is NOT cheap. Nor is it easy. Especially when you're the 10th player into the marketplace.

Keith W

I think you could have chosen better examples for products from Microsoft that have come from behind to win the day. For one, Nintendo had already been dethroned by Sony in the generation before the original XBOX. Furthermore, you may be privy to information the public is not, but I don't think the XBOX division has ever turned a profit. That doesn't strike me as being very successful, though Microsoft has acknowledged they know they are in a marathon instead of a sprint and they certainly have the financial resources to continue. Your comment may be correct in that they did take market share away from Nintendo this last generation, but they were still far outsold by the PS2. Lastly, I think it is too soon to speculate what Zune will and won't do to the market. I think a competitive offering is needed against the iPod, but I'm not sure Zune is it...yet. If additional features are added to better leverage the wi-fi capability, the Zune could be the must-have gadget MS wants it to be.

James  Governor

my thoughts haven't changed. copyright is a side issue. Google had to respond because YouTube was going after their core market- B2B ad spend...

meanwhile Fred Wilson nailed it- a key to success - the choice of Flash interface....

The comments to this entry are closed.

My Photo

Enter your email address:

Delivered by FeedBurner

Twitter Updates

    follow me on Twitter