Google Picks Up YouTube
By: David Utter
The video sharing site YouTube finished a busy day of deals with content providers with the announcement that it, too, had closed a big deal in being acquired by Google for $1.65 billion.
The flurry of discussion that started at the TechCrunch blog on Friday became reality. YouTube and Google disclosed the all-stock transaction of $1.65 billion has been agreed upon and should close in the fourth quarter of 2006.
"Our companies share similar values; we both always put our users first and are committed to innovating to improve their experience," said Eric Schmidt, Chief Executive Officer of Google. "Together, we are natural partners to offer a compelling media entertainment service to users, content owners and advertisers."
While this may be compelling to those parties, it can't be a great time for those Googlers who built Google Video. When a company goes outside to buy something it had been developing internally, it's hard to see that as a vote of confidence for the insiders.
YouTube and Google had both revealed earlier how they had made deal with content providers to carry their copyrights works on their websites. Google announced agreements with Warner Music Group and Sony BMG Music.
Meanwhile, YouTube already had a deal with Warner Music, and reached agreements with Vivendi Universal and Sony BMG for music licensing. CBS Corp and YouTube also signed a deal to distribute video content from CBS on the video sharing site.
These rapid fire deals should alleviate the prominent concerns many had over YouTube's likelihood to be a punching bag for music label attorneys over copyright infringement. The topic of monetizing YouTube was not directly addressed by Google executives during their conference call with analysts discussing the deal.
Tags: YouTube, Google
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