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October 8, 2006

Will Google Purchase YouTube?

You just can't keep YouTube out of the news.

While I was in New York City on Friday, news broke in the afternoon about reports that Google was interested in buying the Internet site that allows users to upload and distribute videos to share with others. The folks in the NYC business and media communities were sure abuzz about these developments and what potential implications it might have for the media industry. The rumor was started on the TechCrunch blog and then confirmed by The Wall Street Journal.

YouTube's rise in power has been well-documented over the past year in particular, and we have written about it several times ourselves, from company partnerships with YouTube to new advertising concepts to fan-generated content to potential legal battles and lawsuits. However, Google's attempts to compete with YouTube through Google Video may not have been quite what the company had in mind, leading to these rumored negotiations for a purchase of YouTube.

The figure that's been released is approximately $1.6 billion.

No one knows whether these negotiations will amount to anything, but it seems fairly certain at this point that they are happening, and this could have significant implications to the future of new media.

Many people have been quoting Mark Cuban, who said last week that anyone interested in buying YouTube is "a moron" becuase of the copyright issues involved. That didn't seem to affect Google's interest, if the figure rumored to be involved with the sale is true.

Corporate consolidation of Internet sites remain a business reality and were inevitable, but it's going to be interesting to see what alliances are made along the way and what implications a Google-owned YouTube could have for users and for other media companies, for instance.

Thanks to Margaret Weigel for sending me some of the info for this post.

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