WSJ: Google in talks to buy YouTube for $1.6 billion

“Google Inc. is in talks to acquire popular video-sharing 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,” Kevin J. Delaney reports for The Wall Street Journal.

Delaney reports, “A spokeswoman for 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.”

Delaney reports, “Founded in February 2005, closely-held YouTube is the poster child for the boom in online video. The company says consumers view videos — which range from short home videos to clips recorded from TV shows — over 100 million times daily through its service and upload more than 65,000 videos each day. YouTube, San Mateo, Calif., has efforts underway to generate more advertising revenue from such traffic. At the same time, it’s trying to address some media companies’ concerns about the presence of video on YouTube’s site that was uploaded without the content owners’ permission.”

“A purchase of YouTube could give a big boost to the online video efforts of Google. YouTube commanded 46% of visits to U.S. online video sites in August, according to market research firm Hitwise. That compared to a 23% share for the video activities of News Corp.’s MySpace social-networking site, and 10% for Google Video,” Delaney reports. “Analysts said a Google acquisition of YouTube would make sense for both companies.”

“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,” Delaney reports.

Full article here.


  1. I love YouTube, but this is just stupid business. The only only non-porn-oriented company that has a strong position in the online video market is Apple, because iTunes is the only internet video service with a profitable business model.

    YouTube is burning through money so much it could be called ZuneTube. They have no revenue stream, no hope beyond a pipe dream of advertising of getting revenue (see dot com failure circa 2000), and enormous expenses because hosting and delivering requires a ton of bandwidth and server space.

    When Google buys YouTube they’re going to be inundated with lawsuits because those people whose copyrighted material has been posted on YouTube will now have a set of deep pockets to go after. Remember how Eminem had a cow when a 10 year old sang one of his songs in an Apple commercial? Now just imagine what’s going to happen to all of those homemade videos that contain Eminem, Beatles, Britney, Snoop Dogg, etc tracks, Google is going to get sued. All for a site that has no revenue stream, but cost them $1.5 billion to purchase.

    Congrats are in order to the founders of YouTube for cashing in, when a sucker walks up to you with a stupid pile of cash, take the money and RUN!

  2. Since there is nothing that youtube offers that google couldn’t copy in terms of usability, they’re effectively paying for the name and the consumer base. Since they would no doubt rebrand it or tie it into their existing video offering, they would likely lose some people as a result. It just seems a lot to pay for a name – which they may not even keep.

  3. I agree with “Tommy Boy”.

    Personally, I don’t understand any of the YouTube hype. I hate watching people’s home movie, and to go to a site that is nothing but thousands of lame home movies seems too Hellish to me.

    If someone is really good at producing budget videos, they have their own website, and I support them much like musicians and other truly talented artists.

    I just don’t get it… but, I guess these are the same people that use Windows, and I don’t understand that either.

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