My Analysis on the Purchase of YouTube by Google
Most people are aware of the fact that Google recently purchased YouTube for 1.65 billion. While that is a fantastic amount of money to virtually everyone, some have wandered if it was in the best interest of the founders to sell the business. Granted, they are now rich beyond their wildest imaginations, but what exactly does Google have up its sleeve? Why would they purchase YouTube when they could have simply used Google Video as a competitor? One of the reasons for this is because YouTube had become a household name for those who frequently use the Internet. A number of studies indicated that the website was getting tens of millions of viewers within the course of just a few hours.
Getting you video to the top 100 in YouTube is like landing a spot of prime time television, at a fraction of the cost. Based on my own analysis, I feel that Google purchased YouTube for the same reason Microsoft attempted to purchase them: YouTube was a threat to Google in some way. One of the oldest tricks in the book for large corporations is to buy out a competitor that has the potential of eventually surpassing them. While $1.65 billion sounds like a lot, I personally believe it may have been a mistake for the founders of YouTube to sell it to Google. There are a number of reasons for this. First, Google already has an enormous amount of influence over the Internet. By selling them YouTube, Google has become a powerful force in the video revolution.
Based on the advances in web technology that Google has made in the past, it is very likely that they will take YouTube and turn it into something that is much bigger than what its founders anticipated. And I can just about guarantee that it will be worth more than $1.65 billion in the long term. At the same time, Google must walk lightly if they wish to continue the success of the product. It is very likely that users will not accept anything less than what they are currently getting. I also think that Google will make a partnership with Hollywood. This partnership will allow Google to profit from the sell of movies, television shows, and videos that are sold through YouTube in the future.
If I were Google, I would have the Hollywood studios sign contracts forcing them to only sell their products through YouTube. This would force out competitors can keep them from being able to upload video content that is copyrighted. I think it was a bad business move for the founders of YouTube to sell the website. Some of you reading this will disagree, but let me elaborate on my thoughts. Now that Google has control over YouTube, they are guaranteed a huge return on their investment if they used the strategy I just mentioned. At the same time, YouTube was stuck in a corner. There were a number of studios that were ready to sue them over copyright infringement.
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