Google snaps up YouTube for $1.65B

[ayabe]

So are they going to create a sanitized version of YouTube for China?

Good financial move? Probably not.

Will this destroy the site? Yes.

 

[Balt]

I like YouTube a lot, but I think this is eventually going to be an utter failure for Google.

Mainly because a very substantial portion of what people like to watch on YouTube is copyrighted material. Eventually there will be a crackdown. There are some video bloggers and independent video directors that have popularity on YouTube, but without copyrighted material to draw ordinary people to the site I don't think the bloggers alone will have enough pull. Especially if you have to watch 30 seconds of idiotic advertising to watch some blogger talk for 60 seconds.

If Google does intend to deliver cable content over the web as some in this thread have speculated, they didn't need YouTube's infrastructure for that. If they just want the YouTube name they paid a pretty hefty price for it. Although they did pay with their overpriced stock shares.

 

[pjargon]

I like youtube a lot better sans google

 

[bucwylde23]

Originally posted by: pjargon
I like youtube a lot better sans google

me too

 

[imported_Tango]

Originally posted by: Balt
I like YouTube a lot, but I think this is eventually going to be an utter failure for Google.

Mainly because a very substantial portion of what people like to watch on YouTube is copyrighted material. Eventually there will be a crackdown. There are some video bloggers and independent video directors that have popularity on YouTube, but without copyrighted material to draw ordinary people to the site I don't think the bloggers alone will have enough pull. Especially if you have to watch 30 seconds of idiotic advertising to watch some blogger talk for 60 seconds.

If Google does intend to deliver cable content over the web as some in this thread have speculated, they didn't need YouTube's infrastructure for that. If they just want the YouTube name they paid a pretty hefty price for it. Although they did pay with their overpriced stock shares.

Actually it was a very succesfull move. They will integrate YouTube in their Google Video service, gaining customer and user bases, and virtually controlling a 100% market share of the internet video business.

They have a lot of cash, they actually have too much cash. Analysts don't like that. They paid for the deal with stock, and the market liked the deal:

http://finance.yahoo.com/q?s=GOOG

Let's see: they acquired you tube for 1.6B stock, and this generated a 2.75% increase in the share price.

130.57B*(1+0.0275)=133.575B

So not only they acquired YouTube for free, they actually gained 1.5B in equity.

On top of this, from an operational perspective, they cut the wings of a possible future competitor on a what is now a niche market but is perceived as growing wildly and possibly being a core business in some near future.

 

[trylok]

Originally posted by: Tango

Originally posted by: Balt
I like YouTube a lot, but I think this is eventually going to be an utter failure for Google.

Mainly because a very substantial portion of what people like to watch on YouTube is copyrighted material. Eventually there will be a crackdown. There are some video bloggers and independent video directors that have popularity on YouTube, but without copyrighted material to draw ordinary people to the site I don't think the bloggers alone will have enough pull. Especially if you have to watch 30 seconds of idiotic advertising to watch some blogger talk for 60 seconds.

If Google does intend to deliver cable content over the web as some in this thread have speculated, they didn't need YouTube's infrastructure for that. If they just want the YouTube name they paid a pretty hefty price for it. Although they did pay with their overpriced stock shares.

Actually it was a very succesfull move. They will integrate YouTube in their Google Video service, gaining customer and user bases, and virtually controlling a 100% market share of the internet video business.

They have a lot of cash, they actually have too much cash. Analysts don't like that. They paid for the deal with stock, and the market liked the deal:

http://finance.yahoo.com/q?s=GOOG

Let's see: they acquired you tube for 1.6B stock, and this generated a 2.75% increase in the share price.

130.57B*(1+0.0275)=133.575B

So not only they acquired YouTube for free, they actually gained 1.5B in equity.

On top of this, from an operational perspective, they cut the wings of a possible future competitor on a what is now a niche market but is perceived as growing wildly and possibly being a core business in some near future.

While I agree that it's probably a good move (certainly not as bad as some here suggest) they really didn't gain any equity. Yes, the share price went up, which does increase their market cap, but it went up purely because of speculation. The 2.75% gain will be an extra 2.75% that the stock will fall if the venture fails, or it will simply be absorbed in if youtube is successful. That said, this was certainly very good news for someone planning to sell their Google stock.

 

[imported_Tango]

Originally posted by: trylok

Originally posted by: Tango

Originally posted by: Balt
I like YouTube a lot, but I think this is eventually going to be an utter failure for Google.

Mainly because a very substantial portion of what people like to watch on YouTube is copyrighted material. Eventually there will be a crackdown. There are some video bloggers and independent video directors that have popularity on YouTube, but without copyrighted material to draw ordinary people to the site I don't think the bloggers alone will have enough pull. Especially if you have to watch 30 seconds of idiotic advertising to watch some blogger talk for 60 seconds.

If Google does intend to deliver cable content over the web as some in this thread have speculated, they didn't need YouTube's infrastructure for that. If they just want the YouTube name they paid a pretty hefty price for it. Although they did pay with their overpriced stock shares.

Actually it was a very succesfull move. They will integrate YouTube in their Google Video service, gaining customer and user bases, and virtually controlling a 100% market share of the internet video business.

They have a lot of cash, they actually have too much cash. Analysts don't like that. They paid for the deal with stock, and the market liked the deal:

http://finance.yahoo.com/q?s=GOOG

Let's see: they acquired you tube for 1.6B stock, and this generated a 2.75% increase in the share price.

130.57B*(1+0.0275)=133.575B

So not only they acquired YouTube for free, they actually gained 1.5B in equity.

On top of this, from an operational perspective, they cut the wings of a possible future competitor on a what is now a niche market but is perceived as growing wildly and possibly being a core business in some near future.

While I agree that it's probably a good move (certainly not as bad as some here suggest) they really didn't gain any equity. Yes, the share price went up, which does increase their market cap, but it went up purely because of speculation. The 2.75% gain will be an extra 2.75% that the stock will fall if the venture fails, or it will simply be absorbed in if youtube is successful. That said, this was certainly very good news for someone planning to sell their Google stock.

It doesn't matter what the price will eventually do. As of today market cap increased, which also means that keeping debt/ratio constant Google's financing capabilities increased as a result of this acquisition.

I do agree that market cap is volatile and shouldn't be the only parameter when judging an operation... but keeping everything else constrant, would you rather have it declining or increasing?

 

[trylok]

Originally posted by: Tango
It doesn't matter what the price will eventually do. As of today market cap increased, which also means that keeping debt/ratio constant Google's financing capabilities increased as a result of this acquisition.

I do agree that market cap is volatile and shouldn't be the only parameter when judging an operation... but keeping everything else constrant, would you rather have it declining or incr easing?

Google's financing capabilities may have increased in the short run, but that's irrelavent unless they need a huge amount of cash for something. And by huge I mean much bigger than a couple billion. I'm sure that they already have the best bond ratings by Moody Morningstar etc. so they just raised the ceiling a litte.

if everything else is constant, any movement would simply represent a correction or an aberration. If I'm looking to buy google, I would prefer downward movement so I can buy more stock for my dollar. If I'm looking to sell google, I would prefer downward movement so I can get more dollars for my stock. If I'm a long term investor who happens to hold Google, I wouldn't really care.

 

[trylok]

I should add that my investment philosophy is long term, and I don't believe in the day trading type stuff, so that probably slants my opinions...