October 10, 2006
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Is everyone up to speed on the surprise purchase of YouTube by Google?
According to an article at CNN.com, YouTube is just a few years old, has a grand total of 67 employees, has yet to show a profit, but sold for $1.65 billion.
So far's I've been able to discover, that's nearly all gravy. Oh, I daresay there are some start-up loans to be repaid, and large credit card balances to be paid off, but even were there to be $65 million in outstanding debt . . . which I seriously doubt . . . that'd still leave a cool billion bucks profit.
Seeing as how I've got some videos stored on YouTube myself (Charles' passing in review at his graduation from Navy boot camp has been viewed over 1,200 times, while one of Alex's Senior Recital snippets is over 1,700), I'm torn between feeling flattered that the repository of my children's videos is so highly valued, and worrying that someone, somewhere is gonna be expected to make the purchase lead to a profit, and possibly those "someones" are those who use YouTube.
A not completely illogical expectation. I mean, they DO provide a service, and bandwidth costs money. How it'd be priced so as to make a $1.65 billion price tag seem sensible in retrospect has me a little anxious.
Mostly, though, I just wish I could come up with some obvious offering such as YouTube, or Broadcast.com, which made Mark Cuban the tantrum-throwing pro-basketball-team owner he is today. There it is, though....for a few years I'd tried to find some way to be able to share the little videos I shoot of the children and grandchildren, but the idea of something like YouTube never occurred to me.
Comments (4)
Actually, that should be "even if there were $650 million in debt... there'd be $1 billion left over" since $0.65 billion is the same as $650 million....
Byron, the precise one.
Right you are, Byron. Right you are.
Engineers. Aren't they just the cutest? :-p
I think the reason for the high price is because Google was going to pay whatever YouTube wanted to get control of the service. You might be right that charging for bandwidth will come out of it, but I'm doubtful -- Google has built its empire on gaining revenue from its services from other sources than user charges, and presumably wanted control of the video sharing service in order to gain revenue in the same way, rather than losing it to YouTube.
Time will tell, I suppose.
Your notes always put a smile on my face. Thanks so much for leaving them! Jury duty...yuck! I've never had it**knocks on some wood**but if it was an interesting case, I think the experience might be worthwhile.
What a deal for the YouTube folks. Google has some serious cash to toss around if they pulled that one off.
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