“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.
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