Google Purchases YouTube for $1.65 Billion

Google grabs YouTube for $1.65 Billion

Google has once again made a clutch offensive move in the Internet advertising world by purchasing the hugely popular video streaming site YouTube. Google is purchasing YouTube for $1.65 billion, making it easily the largest investment the company has ever made. YouTube is a social site which allows members to upload and share personal videos. The site has become immensely popular with now over 70 million online viewers. A surprising outcome from this transaction is the fact that even with Google’s huge bid of $1.65 billion for the company; YouTube is still an unprofitable company. Most of the videos hosted on YouTube are home movies, but there is still a handful of copyrighted material that pops up from time to time. This has caused much criticism on YouTube’s behalf, with many people comparing the company to the original Napster.

However, Google was obviously not worried about the potential lawsuits. Before this purchase, Google has been trying to promote their own video site know as Google Videos, but they have not been nearly as successful as YouTube in this market. Google obviously realized that they could not compete with YouTube, so they turned to the next best option; buying them up. Google is thinking about the future of online advertising with this move. They will once again revolutionize the online advertising market by offering rich streaming media for advertisers, as television advertising looses its appeal.

This spells nothing but trouble for Google’s competitors, like Yahoo, who have relied on many other business models other than advertising to produce profits since Google has been dominating this market for the past couple years. This was a brilliant move for Google in my opinion. With control of a site as popular as YouTube, Google is certainly going to be able to provide an unmatchable advertising product. Google’s stock value may still be over-inflated, but I think that they are moving in the right direction, so their true trade value will probably remain fairly high. As the Internet becomes more of a staple for the advertising world, Google will certainly be in the forefront for a long time to come. I am very interested in finding out what Google has planned next in their quest to conquer the Internet advertising world.