Comments on: Google: We Overpaid $1B for YouTube

By: manhattanguy

manhattanguy — Mon, 19 Oct 2009 10:50:41 +0000

and they still haven’t figured out a revenue model to make money out of it. On top of what they overpaid for the asset, they continue to pay in Operational cost.

By: Mark E Hoffer

Mark E Hoffer — Mon, 19 Oct 2009 10:03:55 +0000

http://phones.verizonwireless.com/motorola/droid/?cmp=OTC-Droid-redirect1

Another major wireless carrier will offer Google’s open-source Android mobile platform as Verizon Wireless agreed to collaborate on “leading-edge mobile applications, services and devices.” With this agreement, Android will now be offered by three of the four major U.S. carriers.

AT&T is the only carrier not yet on the Android train. T-Mobile was first, and Sprint Nextel has also climbed aboard.

Android Devices Soon

The joint announcement doesn’t detail specific devices, services or applications, but talks broadly of the collaboration. The companies said they will co-develop “several” Android-based devices to be manufactured by leading handset makers with applications from both companies and third-party developers. Verizon said Android-based handsets will be unveiled “within the next few weeks.”

Avi Greengart, an analyst with industry research firm Current Analysis, said the collaboration is “not a surprise.” Up to this point, he noted, Verizon hasn’t been an official member of the Open Handset Alliance which promotes Android as a platform, but “they are now.”

Verizon, he said, “clearly needed to offer better devices to compete with Apple and AT&T,” which exclusively distributes the iPhone in the U.S., “and to reduce its overall reliance on Research in Motion,” the maker of BlackBerry smartphones.
http://news.yahoo.com/s/nf/20091006/bs_nf/69343
LSS: AAPL y RIMM

By: Fredex

Fredex — Mon, 19 Oct 2009 08:56:07 +0000

Then there is Bing, an acronym that reads Bing Is Not Google.

By: Bobby2

Bobby2 — Mon, 19 Oct 2009 04:01:19 +0000

Agreed that the next Big Thing will make Google’s investment appear foolhardy. MySpace anyone?

By: some_guy_in_a_cube

some_guy_in_a_cube — Mon, 19 Oct 2009 01:00:11 +0000

You Tube is wonderful today but the problem for the rocket scientists at GOOG is that You Tube will be hopelessly co-opted by the next Big Thing 10 years from now if not sooner. Better to place lots of little bets with all that cash and try to land the next Big Thing or two or three. But it’s their genius ass, so who cares? They overpaid by $1.65 billion.

By: DM RTA

DM RTA — Mon, 19 Oct 2009 00:29:30 +0000

I agree with Mark and will raise him. YouTube will pay off big over a longer horizon, especially as mobile expands to meet its potential. Jeffshattucks’s point seems right, but to me the long term horizon (ten years+) will test this incessant ‘pay me royalties’ for derivative uses that would benefit sales if the creative product was priced right in the first place. The kids will fix what the Boomers refused to see.

By: rmasand

rmasand — Sun, 18 Oct 2009 23:37:14 +0000

I was just as skeptical of this acquisition when it happened as anyone. Since then however, YouTube has evolved into the quintessential provider of video on the web. As synonymous with video as Google itself is with search and Wikipedia with knowledge. Its a little harder to monetize but Google will figure it out. And a few years from now the few hundred million that Google could have saved will prove inconsequential and the acquisition will prove to have been visionary.

By: Steve Barry

Steve Barry — Sun, 18 Oct 2009 22:47:04 +0000

A study once concluded that companies with over-inflated stocks make more stupid decisions than other companies.

By: impermanence

impermanence — Sun, 18 Oct 2009 22:06:17 +0000

Barry writes:
“When Google bought YouTube, the deal was mostly panned. (but I liked it — the increase in G’s value paid for the deal almost instantly) )”

Barry, regardless of what happened to the price of the stock (temporary), over-paying for an asset, purposely, is pretty stupid. (We can assume here that “overpaying” means he could have offered $1B less and still had the deal.)

Overpaying is how business people become poor quickly.

By: jeffshattuck

jeffshattuck — Sun, 18 Oct 2009 21:58:19 +0000

Google… smart guys. They keep telling the world they “overpaid” for You Tube because You Tube doesn’t generate much in the way of revenue. Whatever.

Google claims poverty because it doesn’t want to have to pay any sort of standard royalty rate on You Tube content. Here’s the truth, though: Google bought You Tube to gain access to the search pool and use the data to tweak the Google algorithms behind Adwords. And the better Adwords performs, the more money Google makes.

In other words, Google is making a boatload of money from You Tube, just indirectly.