Final Update on this post: The deal is done, check out the report on NY Times.
- Techcrunch mentioned the possibility of Google purchasing YouTube.
- The New York Times is tracking the deal very closely!
A deal for YouTube would be the crowning moment for a property that emerged as a cultural phenomenon almost immediately after it officially began last December. Its site, which delivers more than 100 million video clips a day, allows users to share a broad array of offerings from news clips to home movies to spoofs — sometimes funny but often simply crude — created by ordinary users.
Friends mentioned to me the other day that one can watch on YouTube just about anything I can watch on Indian television. This is not really a huge issue, I can’t imagine Karan Johar being upset that his interview with Aishwarya Rai (on Coffee with Karan) has been broadcast to the remaining millions who don’t have access to Indian TV. Again, from the article:
Almost single-handedly, YouTube has both popularized the sharing of videos and empowered would-be movie makers around the world. The site is also facing possible legal challenges over the unauthorized posting and sharing of videos. Yet a number of media companies would prefer to embrace YouTube as a partner, rather than treat it as a pariah, as was the case with Napster.
While it may appear as if I have been living under a (Web 1.0) rock, I only recently learnt of the fundamental value proposition offered by YouTube.
- Come online, register with YouTube whoever you are, wherever you might be.
- Upload a teaser of the video (or other media) you have to offer.
- Offer your contact details with the video.
- Inform your clique of the video, hope it catches on and is rated well.
- Wait for offers, requests and feedback to come back in.
The other trend with online users that YouTube rides is video sharing. Today, I received an e-mail from a friend with a link to a video of Schumachers driving technique. Of course, the video was part of YouTube’s massive collection. To conclude, YouTube already fits in well with how online users work.
Before I end this post, I will leave you with some more analysis on why Web 2.0 does make business sense. Again, from the New York Times article,
The $1.6 billion price tag, while seemingly rich for so young a company, makes sense, research analysts said.
“That’s expensive but not unreasonable,” said Charlene Li, an analyst with Forrester Research. Ms. Li estimated that the company has about 50 million users worldwide, which works out to a purchase price of about $32 a user.
The deal would make sense from the perspective of both companies, Ms. Li and others said.
So, if you have an idea that you fear is not immediately monetizable, especially if your approaching the problem from the consumer-end – think again, it may be worth more than you believe.