Well its confirmed yesterday that the search giant google has acquired the online video giant Youtube for a staggering 1.65 billion dollars in a stock deal. Tech crunch had earlier speculated that the deal was on the cards and within 3 days of the specualtion the deal was confirmed. Google did a conference call in order to give details about.
Now what are the details of this deal?
Stock for stock transaction i.e. google shares were givn to youtube founders.
YouTube will continue to operate independently and will continue to have the same brand name.
YouTube will continue to be based in San Bruno, CA, and all YouTube employees will remain with the company.
The number of Google shares to be issued in the transaction will be determined based on the 30-day average closing price two trading days prior to the completion of the acquisition.
Both companies have approved the transaction, which is subject to customary closing conditions and is expected to close in the fourth quarter of 2006.
Well lets take into consideration some startling facts!
You tube is just 19 months old!
It has just 67 employees!! I have never heard of a 1.65 billion dollar company that has only 67 employees!
Its has just through on round of funding thats is around $11.5 million and the main venture company that hold maximum stake is Sequoia Capital with 30%.
Youtube holds 46% of the online market share according to Hitwise.
Now though youtube might be the market leader in online video many analyst have raised questions over its future especially with regards to copyright issues.
But despite the copyright issues i think this article points out the 5 most important reasons why google acquired youtube. The one im really sure about is the huge synergy between google video ads and youtube. Google adwords already has so many advertisers that helping youtube monetise its video viewing traffic wouldn’t be a problem at all!
Read more about google youtube stories from different sources below
Techcrunch, PaidContent, InformationWeek
