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October 9, 2006

Where’s the thunder?

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Susan and I were sure that if Google and YouTube announced a merger today that there would be thunder and lightening and fire in abudance, but the news has broken and yet it is another sunny California day. How boring.

After initially starting the rumor buzz on Friday, Michael Arrington confirms that Google has acquired YouTube for $1.65 billion in stock. The stock transaction will end in the fourth quarter and will allow YouTube to operate independently of Google. Also, in an almost twist, TechCrunch reports that Yahoo! was involved in the bidding war until “very close to the end”. [Ooo! I want to hear more about that.]

I’m hearing lots of people say this was a “natural fit” for Google, but it all seems very odd to me. Since when is Google in the habit of acquiring branded companies? YouTube may only have a staff of 60+, but they’re a long way from being some undiscovered start-up. Google’s mergers are generally very behind the scenes; this whole thing is very public and very odd.

The only saving grace here is that both companies are playing this as a parties-will-stay-independent scenario. I wonder how long it will stay that way. There has to be some plan to unite use these two closer down the road.

Looking on the bright side, and knowing this story is already over-reported despite no one having any real details, I give you, in descending order, the Top 5 reasons why today’s merger is at all interesting.

Ready?

5. Better video advertising: No more boring, repackaged video ads. Now that AdSense publishers will be able to create targeted ads to run on YouTube you can only hope they will become more attractive. YouTube has a hugely loyal audience, win them over and you will be amply rewarded. If you haven’t paid attention to video advertising, now’s the time to perk up.

4. More Google lawsuits: Though YouTube was often criticized for copyright infringement, they were very good at keeping themselves out of court. Why? Relatively small pockets.

Not anymore. Now that the Google name is associated with YouTube, content owners will be crawling out of the woodwork trying to sue. Rest assured, Scoble says just like has Microsoft survived, so will Google. They may lose a few of the starting battles, but they’ll eventually win the war. I wonder who will be the first to sue? Any bets? [Mark Cuban because now he's going to be proven wrong about the whole 'morons' thing.--Susan]


3. Better Protection for Content Owners: With endless lawsuits come better copyright laws, laws that will have to compensate content owners. This could get fun.

2. At least it’s Google: Google buying YouTube means that Yahoo! and Microsoft can’t – which may have been Google’s prime motivation for the purchase to begin with. At least Google won’t waste the acquisition and won’t do something awful like try to re-brand YouTube. Microsoft Windows Live Video Search, anyone?


1: It’s over: Now we can stop talking about it. Huzzah!

Postscript: Gary Price must have read an entirely different press release than we did, reporting that Google acquired Yahoo! for $1.65 million. Oh, if only, Gary! That would have made a much more entertaining story. Can you imagine the gems we would have gotten out of Terry Semel! Hehe.

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