WSJ: Google in talks to buy YouTube
By KEVIN DELANEY for the Wall Street Journal
October 6, 2006 12:11 p.m.
Google Inc. is in talks to acquire online video site YouTube Inc. for roughly $1.6 billion, according to a person familiar with the matter. The discussions are still at a sensitive stage and could well break off, this person says.
A spokeswoman for closely held YouTube could not be reached for comment. A Google spokesman said, "We don't comment on rumors and speculation." Rumors of such talks were reported earlier on the TechCrunch blog.
YouTube is a poster child for a new generation of startups, which is surging thanks to the growth in usage of the Internet and online advertising. Founded in February 2005 in a garage by three twentysomething alums of eBay Inc.'s PayPal electronic-payment unit, YouTube quickly built a huge consumer following for videos online.
Now users watch more that 100 million videos daily, and the site's market share tops that of similar services from the likes of Google, according to some research firms. In recent months, the company has tried to profit from its popularity by expanding the types of ads it sells to include videos on its home page and reaching out to media companies to defuse the threat of legal action against it.
Rumors circulated earlier this year that some major media companies expressed interest in buying closely-held YouTube. Chief Executive Chad Hurley said at the time that the company was not for sale and an IPO in the future was a possibility.
YouTube has stood out from the growing crop of online video services for its simplicity. YouTube serves up videos that generally can be viewed without users downloading special software. It also let consumers display its videos on other sites, such as blogs or personal pages on News Corp.'s popular MySpace social networking service.
Last month, the San Mateo, Calif., company announced a new system to give media companies more control over the video on the site and to address their fears that others will profit from consumers' piracy of their content. Warner Music Group is the first entertainment company to embrace the system. It will post its catalog of music videos on YouTube and collect an unspecified percentage of the revenue from advertising appearing alongside them. [link]
October 6, 2006 12:11 p.m.
Google Inc. is in talks to acquire online video site YouTube Inc. for roughly $1.6 billion, according to a person familiar with the matter. The discussions are still at a sensitive stage and could well break off, this person says.
A spokeswoman for closely held YouTube could not be reached for comment. A Google spokesman said, "We don't comment on rumors and speculation." Rumors of such talks were reported earlier on the TechCrunch blog.
YouTube is a poster child for a new generation of startups, which is surging thanks to the growth in usage of the Internet and online advertising. Founded in February 2005 in a garage by three twentysomething alums of eBay Inc.'s PayPal electronic-payment unit, YouTube quickly built a huge consumer following for videos online.
Now users watch more that 100 million videos daily, and the site's market share tops that of similar services from the likes of Google, according to some research firms. In recent months, the company has tried to profit from its popularity by expanding the types of ads it sells to include videos on its home page and reaching out to media companies to defuse the threat of legal action against it.
Rumors circulated earlier this year that some major media companies expressed interest in buying closely-held YouTube. Chief Executive Chad Hurley said at the time that the company was not for sale and an IPO in the future was a possibility.
YouTube has stood out from the growing crop of online video services for its simplicity. YouTube serves up videos that generally can be viewed without users downloading special software. It also let consumers display its videos on other sites, such as blogs or personal pages on News Corp.'s popular MySpace social networking service.
Last month, the San Mateo, Calif., company announced a new system to give media companies more control over the video on the site and to address their fears that others will profit from consumers' piracy of their content. Warner Music Group is the first entertainment company to embrace the system. It will post its catalog of music videos on YouTube and collect an unspecified percentage of the revenue from advertising appearing alongside them. [link]
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