What the online community says about the Google YouTube purchase.

Google bought the YouTube Inc. for US$1.65 billion Monday.

YouTube lets people upload and watch videos world wide. The site has become immensely popular, not at least because of the arrival of broadband. Google already has its own video sharing site called Google Video, but that site has never really caught people’s imagination.

1.65 billion US dollars is a lot of money, and many commentators have asked themselves why Google has done this.

Google has normally focused on the technology, and has — unlike Yahoo! — not considered itself a content producer. Some see this acquisition as proof of Google going in Yahoo’s direction.

However, this move may equally well be motivated by a wish to capture the Web 2.0 audience, young, internet savvy, users that will produce the content for Google, in the same way they do on Google’s own blogger.com or on the very popular blog/file-sharing site Myspace.com.

Popular content means the possibility of serving context sensitive text ad, generating much needed revenue.

Google acting as a leader

Searchviews takes a positive spin: “Google acted like a market leader, quickly and decisively, in snapping up a competitor who has built what seems to be becoming the de facto standard for storing, sharing and commenting on video content on the Web.”

Searchviews notes that YouTube was able to grow its valuation by US$2.6 million every day since its launch in February 05. However, the post has a scent of dot com euphoria.

The copyright problem

blog maverick still thinks “Google is crazy”, but that the company has done the right thing. The blogger argues that Google has one major thing to worry about, namely copyright. Too many users may upload copyright protected material, giving Google’s lawyers a busy time:

Millions of copyrighted videos that their owners spent a boatload to copyprotect that is available to everyone and everyone without it.

This is probably why Google and YouTube has made deals with the record labels, maverick adds.

Declan McCullagh and Anne Broache makes the same point in their article “YouTube may add to Google’s copyright worries”. As a start up YouTube did not grab the same attention from lawyers as the giant Google will do, they argue:

YouTube’s–and therefore Google’s–potential legal liability depends on how the courts interpret an area of copyright law that remains surprisingly unsettled.

Webmaster World guru Brett Tabke is not too worried: “Why? [Copyright infringements actions haven't] slowed Google down yet - why would it now?” Then he points to Google’s cached version of the CNN article “Cuban: Only a ‘moron’ would buy YouTube”.

Advertising

Greg Sterling of Search Engine Journal thinks the most interesting thing will be to see how Google tries to approach large advertisers and content producers now with the leading video property:

And it will also be interesting to see how Google tries to position its own video site now that it has a more powerful asset in house.

Google has so far decided to continue YouTube as a brand and a community and the company will maintain it as a separate operating division of Google. It will not be merged with Google Video.

YouTube’s marketshare

The New York Times notes that Google had to fight back suitors like Microsoft, Viacom, Yahoo and the News Corporation.

NYT points out that YouTube has a 46 percent share of online video traffic, MySpace has 23 percent and Google Video has 10 percent. Now Google is the leader.

The technological take on YouTube

Some has noted that YouTube is not profitable, partly beacuse it takes a lot of server power to serve all those videos. Linear at Webmaster World has one explanation:

What GOOG does best is deploy computing capacity cheaper than any of the competition. They’ve commoditized the infrastructure. So just because Youtube couldn’t show a profit doesn’t mean that GOOG can’t–GOOG can drive the costs down, I’ll bet by a factor of ten to be conservative. Twenty may be realistic.

However, others taking part in that discussion is not equally enthusiastic about the deal:

“mzanzig” estimates that about 60% to 80% of the content to be non authorized, copyright protected content.

Once they introduce other ways to monetize the traffic (pre-roll, post-roll, mid-roll, overlay), people will leave the site. As someone pointed out, very few people will watch a 15 second pre-roll ad to watch a 45 second ‘movie’ created with a shaky mobile phone.

Google becoming a content provider

Greg Linden thinks Google buying YouTube is a horrible idea:

Google has never been about owning content and users before. Google makes it easier to find other people’s content. Google’s core strength is in helping people find and discover information, not in controlling information and people.

His worry is that Google loses its focus on technology and “begins a stumbling effort at trying to become a media company.”

Search Engine Watch has more: Recapping Coverage Of Google’s Acquisition Of YouTube