Google Buys YouTube
publication date: Oct 10, 2006
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author/source: Terry Robson
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A profitless Web site started by three 20-somethings after a late-night dinner party has just sold for more than a billion dollars.It sounds like a tale from the late 1990’s dot-com bubble, but it has just happened.
Larry Page and Sergey Brin, two founders of Google, are hoping the profit potential of YouTube will outweigh the liability potential.
Google, the giant online search engine, agreed yesterday to pay $1.65 billion in stock for the Web site that came out of that party — YouTube, the video-sharing phenomenon that is the darling of an Internet resurgence.
Virtually every big media and technology Company had coveted YouTube, as they seek to tap into a generation of consumers who are viewing 100 million short videos on the site every day.
Google is expected to try to make money from YouTube by integrating the site with its search technology and search-based advertising program.
But the purchase price has also invited comparisons to the mind-boggling valuations that were once given to dozens of Silicon Valley companies a decade ago. Like YouTube, those companies were once the next big things, but some soon folded.
Google, with a market value of $132 billion, can clearly afford to take a gamble with YouTube.
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