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WSJ: Google in talks to buy YouTube

updated 02:25 pm EDT, Fri October 6, 2006

Google May Buy YouTube

Google is in sensitive discussions to buy the video host YouTube, an anonymous source has told the Wall Street Journal. The deal [note: link expires after Friday] is reported to be valued at $1.6 billion and would give Google an effective monopoly over web-based video, according to journalist Kevin Delaney. YouTube, which serves over 100 million videos per day, has been considered a problematic takeover prospect by many as its popularity stems from both legitimate amateur and official videos as well as the illegal clips from movies and TV shows that are often uploaded without YouTube's knowledge or consent. Google Video by contrast retains a significant but considerably smaller share of Internet video streaming.

If accurate, the move may also have substantial consequences for Apple, whose Board of Directors includes Google CEO Eric Schmidt. The absorption of YouTube into Google would give Schmidt a strong influence over Apple's own recent movie initiative and could result in the merging of web-based video with Apple's largely closed system.



By Electronista Staff
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  1. bfalchuk

    Fresh-Faced Recruit

    Joined: Jul 2003

    0

    Apple?

    I don't know that this would do anything to Apple. I'm sure they keep Schmidt out of the meetings that relate to a service his company competes with.

    The big advantage for Google would be YouTube's better traffic numbers, and superior interface (and video quality). It would also give Google what Google always hungers for...more of the web within its servers so it know what people are doing, and can give better search and advertising results.

    If anyone can monetize YouTube, I'd suspect Google is probably one of the best suited to do so. They can certainly cut the cost of operation significantly since they must have plenty of scale in their systems today, and own a ton of fiber, so they could cut those hefty bandwidth bills, and thus make YouTube much cheaper to run.

    Then again, I'm not so sure this really makes sense for Google. I guess we'll just have to wait and see.

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