Tuesday, October 10, 2006

Google buys YouTube for $1.65 billion

The speculation is over: Google announced October 9th that it has bought video sharing Web site YouTube for more than one and a half billion dollars in stock. According to Google's official announcement, YouTube will operate independently, its offices will stay at their current location in San Bruno, California, and all 67 YouTube employees will remain.

Acquisitions are nothing new in the fast-growing, quickly consolidating Internet business. And Google has purchased a number of companies in its efforts to move from search engine to software and service provider, content supplier, and advertising giant.

But the YouTube purchase is breathtaking in a number of ways:
* It is supposedly the first Internet start-up company to be bought for more than $1 billion
* YouTube has only about four dozen employees total, as noted above
* Although YouTube provides more than 100 million video views a day, the company has only been in existence for a little over a year and a half.

In the past YouTube has been criticized (and threatened with legal action) for posting copyrighted videos without permission. But both Google and YouTube have in recent days signed deals with major music and TV companies to license content. CBS is said to be creating its own YouTube channel for TV shows like Survivor.

Hmmm, $1.65 billion for 67 employees... I'd say YouTube's small staff of hardworking employees is about to get a nice bonus!

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