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I put this in this forum because the bolded passages show you "this is how you do it".
Google bets big on video
Search giant will buy YouTube for $1.65 billion, work to turn video site's legal enemies into partners.
Google agreed Monday to pay $1.65 billion to acquire online video giant YouTube, a deal anticipated for several days. Now that the combination is official, the question is whether the deal guarantees full employment for every copyright infringement lawyer in the country.
The problem: A lot of the content on YouTube, according to some critics, is in violation of copyright laws. Google is clearly betting that it will be able to solve that issue, or at least make it affordable. The plan appears to be to turn YouTube's current adversaries into partners. And Wall Street apparently thinks the new partners will make it work. Google (GOOG, news, msgs) shares were up 2% in regular trading today and up slightly more in after-hours trading.
If Google is wrong, well, YouTube's current owners just got insanely rich because they held all the cards.
Right now, the hottest growth area of the Internet is video, thanks to wide expansion of high-speed connections that lets users upload and download video clips quickly and easily.
YouTube, to this point, has been the leading beneficiary of all that up- and downloading, with a 46% share in the online video arena, according to The Wall Street Journal, quoting research firm Hitwise. YouTube's terms of use ask people not to submit copyrighted material, but the service does not use technology to identify copyrighted music and video. When organizations tell YouTube about violations, the videos are removed.
The hurdle YouTube faced even before the Google deal was how to keep all that video on its site without facing legal battles. There appear to be three ways to solve the problem:
* Employ filters in combination with humans who are hired to spot copyright-infringing material. This is what Google says it does. YouTube has said it will start using audio-identification technology as part of a distribution deal it signed with Warner Music last month.
* Go to court.
* Cut deals.
Google and YouTube appear to be going with deal cutting .
Recently, Doug Morris, chief executive of Vivendi's Universal Music Group, told investors that YouTube and MySpace, the second most popular video-sharing site, owed Universal "tens of millions of dollars'' for infringing copyrights.
But today, before the acquisition was announced, the combatants joined forces, as Google and YouTube got Universal to agree to a content deal. YouTube already had deals in place with CBS and Sony BMG Music.
The strategy will work as long as there's enough money on hand to satisfy the content providers. Google, it just so happens, is sitting on $10 billion in cash.
There are other issues that Google will also have to figure out, including:
* How fast can Google figure out how to make money from YouTube's videos?
* Are YouTube viewers ready to be hit with a barrage of advertising?
The deal has been rumored for a week, and the details were pretty well leaked before it was announced after today's stock-market close.
Google will pay $1.65 billion in stock for the online video company, which has been in business for a little less than two years.
The price makes YouTube by far the most expensive purchase made by Google during its eight-year history. Last year, Google spent $130.5 million buying a total of 15 small companies.
YouTube will continue to retain its brand, its new headquarters in San Bruno and all 67 employees, including co-founders Chad Hurley and Steve Chen. Meanwhile, Google will continue to run a less popular video service on its own site.
Investors applauded the possible acquisition as Google Inc. shares climbed $8.50 to close at $429 on the Nasdaq Stock Market, then added another $3.11 in extended trading.
Since the company started in Hurleys garage in February 2005, YouTube has blossomed into a cultural touchstone that shows more than 100 million video clips per day. The video library is eclectic, featuring everything from teenagers goofing off in their rooms to William Shatner singing Rocket Man during a 1970s TV show. Most clips are submitted by users.
YouTubes worldwide audience was 72.1 million by August, up from 2.8 million a year earlier, according to comScore Media Metrix.
Google bets big on video
Search giant will buy YouTube for $1.65 billion, work to turn video site's legal enemies into partners.
Google agreed Monday to pay $1.65 billion to acquire online video giant YouTube, a deal anticipated for several days. Now that the combination is official, the question is whether the deal guarantees full employment for every copyright infringement lawyer in the country.
The problem: A lot of the content on YouTube, according to some critics, is in violation of copyright laws. Google is clearly betting that it will be able to solve that issue, or at least make it affordable. The plan appears to be to turn YouTube's current adversaries into partners. And Wall Street apparently thinks the new partners will make it work. Google (GOOG, news, msgs) shares were up 2% in regular trading today and up slightly more in after-hours trading.
If Google is wrong, well, YouTube's current owners just got insanely rich because they held all the cards.
Right now, the hottest growth area of the Internet is video, thanks to wide expansion of high-speed connections that lets users upload and download video clips quickly and easily.
YouTube, to this point, has been the leading beneficiary of all that up- and downloading, with a 46% share in the online video arena, according to The Wall Street Journal, quoting research firm Hitwise. YouTube's terms of use ask people not to submit copyrighted material, but the service does not use technology to identify copyrighted music and video. When organizations tell YouTube about violations, the videos are removed.
The hurdle YouTube faced even before the Google deal was how to keep all that video on its site without facing legal battles. There appear to be three ways to solve the problem:
* Employ filters in combination with humans who are hired to spot copyright-infringing material. This is what Google says it does. YouTube has said it will start using audio-identification technology as part of a distribution deal it signed with Warner Music last month.
* Go to court.
* Cut deals.
Google and YouTube appear to be going with deal cutting .
Recently, Doug Morris, chief executive of Vivendi's Universal Music Group, told investors that YouTube and MySpace, the second most popular video-sharing site, owed Universal "tens of millions of dollars'' for infringing copyrights.
But today, before the acquisition was announced, the combatants joined forces, as Google and YouTube got Universal to agree to a content deal. YouTube already had deals in place with CBS and Sony BMG Music.
The strategy will work as long as there's enough money on hand to satisfy the content providers. Google, it just so happens, is sitting on $10 billion in cash.
There are other issues that Google will also have to figure out, including:
* How fast can Google figure out how to make money from YouTube's videos?
* Are YouTube viewers ready to be hit with a barrage of advertising?
The deal has been rumored for a week, and the details were pretty well leaked before it was announced after today's stock-market close.
Google will pay $1.65 billion in stock for the online video company, which has been in business for a little less than two years.
The price makes YouTube by far the most expensive purchase made by Google during its eight-year history. Last year, Google spent $130.5 million buying a total of 15 small companies.
YouTube will continue to retain its brand, its new headquarters in San Bruno and all 67 employees, including co-founders Chad Hurley and Steve Chen. Meanwhile, Google will continue to run a less popular video service on its own site.
Investors applauded the possible acquisition as Google Inc. shares climbed $8.50 to close at $429 on the Nasdaq Stock Market, then added another $3.11 in extended trading.
Since the company started in Hurleys garage in February 2005, YouTube has blossomed into a cultural touchstone that shows more than 100 million video clips per day. The video library is eclectic, featuring everything from teenagers goofing off in their rooms to William Shatner singing Rocket Man during a 1970s TV show. Most clips are submitted by users.
YouTubes worldwide audience was 72.1 million by August, up from 2.8 million a year earlier, according to comScore Media Metrix.
