Google announced its decision to acquire YouTube for $1.65 billion in stock last Monday. Since then, there has been a lot of discussion around the deal and what it means for social networking and video sites, and the broader Internet. In this week’s series, we will pool together the various commentaries to get a view into tomorrow’s world.
Jim Moore wrote:
Google launched Google Video–land and soil. Google video is a barren stretch of land. Google Video is a good service, but few planted seeds in it.
So now Google has, wisely I believe, purchased YouTube. What did Google purchase? Momentum. Community. Quality community content. A successful creative community ecosystem.
It is the ecology, smarty!
The intangible asset that makes a difference is an ecosystem with community creativity at the core, with widespread public recognition and public creativity about the daily creations of the community, and with easy ways to check out the current content and send it to one’s friends.
These characteristics are then crossed with market size and service growth rate, and from the result you can estimate value to the new world, and thus to potential investors.
YouTube, Myspace and FaceBook have community creativity, widespread recognition, and easy ways to visit and forward content.
News.com published an analysis from Forrester Research:
The search giant already has the No. 3 video site, but now it will own a networking platform that makes video stickier–and better for advertisers.
To make this huge purchase worthwhile, Google must move rapidly to do three things: first, address the problem of users uploading copyrighted content; second, encourage marketers to think beyond traditional video advertisements; and third, maintain YouTube’s excellent video selection and viewing experience.
Google’s video site hosts more than 1.5 million videos, but the people who submit them are nearly invisible. By contrast, YouTube’s site lets visitors rate videos, save them as favorites, comment on them, share them, see related videos and view other users’ playlists, creating the largest and most active video community on the Web.
The first 10 years of the Web were focused on text, graphics and pages. With broadband users popping past half of all online users, text is passe. The next generation of sites will be video-heavy, and users will be as much a part of the experience as the content. Get your ad agency’s video production folks together with your word-of-mouth marketers–they’re going to need to collaborate to invent tomorrow’s Web experience.
Danny Sullivan wrote: Various people see sense in YouTube diving for the copyright cover that Google’s somehow supposedly going to extend. I don’t know what super copyright protection technology they’re expecting Google to cook up. To date, Google has had plenty of copyright violations it struggles with. Overall, the biggest takeaway for me is how the YouTube purchase is the end of an era of Google buying small. To date, most purchases have been tiny. But with loads of cash in its pockets, Google’s jumped into the second round of billion dollar purchases of web sites that’s been going on.
Tomorrow: Comments (continued)