free html hit counter First Blush on GooTube - Conference Call | John Battelle's Search Blog

First Blush on GooTube – Conference Call

By - October 09, 2006

Gootube-2The markets like it - GOOG is up $8.50.

I’m listening to the conference call. Chad Hurley is talking about the integration of Google search into YouTube and also is talking about how YT is focused on helping media companies to monetize their content.

Why YouTube when you had Google VIdeo? Eric said Google Video was doing well, but YouTube was a clear winner in the social networking side of video…

Why stock, not cash? David Drummond of Google: So as to make it tax free for the shareholders.

How large are YouTube’s costs? No comment save Eric: “they have been thrifty.”

Monetizing YouTube: In the near term and mid term what is it coming from, search or video? Eric: We don’t give guidance. We’ve come up with 20-30 places where Google tech can help. Most people believe this is just the beginning of the Internet video revolution.

What did you use to value this acquisition? We typically don’t go into that. David: We modeled it this on a “synergistic model”.

What role did copyright play in this acquisition and what steps are you taking there? YT: From the beginning we’ve always respected rights holders’ rights. We now have the resources (at YT) to continue that. David: The YT vision and commitment to enforcing copyrights – relying on the safe harbor of the DMCA – is similar to ours.

What integration might be expected in the short term? Sergey: we care very much about search – we want to include YT’s videos in that – and also we will work on the advertising solutions. There is a great deal more experimentation and trials to be done. Google Video doesn’t go away ever (Eric).

Datamining: Sergey: We have no intention to do that.

Will you keep the brand separate: Eric: Yes. It has great value.

This is the next step in the evolution of the Internet. …it’s a natural next step. (End of call)

I am mixed on this. I think it’s wise to frame this as “the companies will stay separate” kind of acquisition, even if in the end that’s not the intent. But this marks Google’s first significant “out of brand” acquisition, the company’s first true brand-management challenge. I’m not counting Blogger in here because, well, it wasn’t this big. More to come…

Related Posts Plugin for WordPress, Blogger...

15 thoughts on “First Blush on GooTube – Conference Call

  1. For me Hurley and Chen are in the middle in the spectrum, while Page-Brin are on the tech savvy geek corner, and Anderson-DeWolfe are the social-networking-hub margin. Not really the same tech- and company culture, just the half.

  2. Narendra says:

    The acquisition was a bold but very good move in my opinion. Keeping YouTube a separate brand is also ideal because they desperately need to avoid becoming a monolith the way Yahoo did. In fact, everything they put out from now on should be separate unless it is related to search. Forget trying to halo homespun projects. If a company has the cash, buy up the cool brands and let them flourish (or die as the case may be). It keeps pride in the product team and keeps the sky as the limit. Who knows, YouTube may be bigger than Google some day ;-)

  3. John says:

    Google still keeps the Picasa brand. But yeah, YouTube is the first “biggie” stand alone brand.

  4. Vikram says:

    Is it googles realisation that no matter
    how great/innovative company may be it cannot monopolise/dominate the world?
    or
    Is it to show to workd that its “Do No Evil” company ready to collaborate with others and do a successful company
    or
    Is it a business usual for google?

  5. Hashim says:

    When Google launched video, they tried to solve the problem of hosting and viewing video content on the web. YouTube solved it better.

    Now there’s a bigger problem – we need VIDEO SEARCH regardless of where the video is hosted.

    I hope Google Video turns into a search app, which is Google’s strength.

  6. Louis Gray says:

    This deal smacks of the 1999-era whoopla around Net companies and their inflated valuations. Google and YouTube are both market leaders, but the financials around YouTube seem invisible. It should be interesting how Google shows that in their financial reports, but until then, we’re seeing an all-stock transaction by a company whose valuation is stratospheric for a company who is a point-in-time leader.

    I see this as Google admitting Google Video would not become the market leader, as well as a preemptive move against Microsoft and Yahoo!.

  7. Though $1.65 Billion is a very high price, it is just 2% of stock value of Google. And with the recent buzz of the acquisition, Goolgle stock value has already gone up by 5%. So it was a smart move by Google.

  8. Billiger says:

    1,65% billion – for a plattform that hosts vidoes. The simplest ideas are the best!

  9. sufiy says:

    On this deal WEB 2.0 has turned into bubble 2.0. Google has admited that inside nothing substantial could be created, the main logic was “if we will not buy it MSFT or AHOO will! And then what…Google will vanish? Where is all that brand strength, dominant market share? The truth is it is one stream revenue business, competitors just ONE CLICK away, cost swith for customer Zero. Look at their CC about the deal: company is under hit of contracting revenue growth and most importantly FCF, which will bring valuation and stock price down. The most interesting for me is how they are gonna make this q, numbers are gonna be very tought to meet.
    http://photos1.blogger.com/blogger/2373/2953/1600/scan0012.0.jpg

  10. Possibly the initial discussions began at the famous, annual Allen & Co. media conference in July.

    It thais IS in fact the case, nothing better illustrates the power of this ultra-exclusive, high level networking evemt.

    http://www.washingtonpost.com/wp-dyn/content/article/2006/07/13/AR2006071301315.html

    But is would be interesting to uncover if Yahoo or AOL ever considered acquring YouTube

  11. dumbfounder says:

    google considers not buying myspace the stupidest thing ever because now they are paying MySpace $1B over the next 3 years just so Yahoo and MSn don’t get those revenues. they will make next to nothing on that deal. they know the same thing would happen with Youtube. They HAD to acquire Youtube, it would have been silly to not do it.

  12. This action has to be viewed through the prism of Google realizing they made a mistake by NOT buying MySpace.

    The upside is that even though Google is paying a much higher price for YouTube… the user experience on YouTube is dramatically better than MySpace.

  13. Outta Names says:

    Google is looking dumber and dumber by the day. Ok, so why did they have to pay MySpace? It is a sucker deal. They don’t know when hold ‘em and when to fold ‘em.

    There is no viable long term strategy coming out of Google. It is all Microsoft envy. If they were smart they would let their competitors take the loser deals. What we will end up with is a ponzi scheme with razzle dazzle, look what I bought Mommy. Do you love me Mommy? Then bid up my stock so I know you love me Mommy. Mommy? Mommy are you there Mommy? You’re not listening to me Mommy!

    At the end of the day, if they have more money than they know what to do with, they should pull a Whole Earth Catalog and give it away like Stuart Brand.

  14. Howard Owens says:

    Those who think this is just another bubble play really don’t understand the Web.

    Also, it’s smart to keep the YouTube brand, but one question I haven’t seen answered yet: What happens to Google Video?

  15. YAHOO DID ATTEMPT TO ACQUIRE YOUTUBE A FEW WEEKS AGO

    http://www.nytimes.com/2006/10/11/technology/11yahoo.html?ex=1318219200&en=9c7b9302aa9d22c6&ei=5088&partner=rssnyt&emc=rss

    Yahoo itself tried to buy YouTube just a few weeks ago and got as close as negotiating price and terms, according to an executive briefed on the discussions. But the talks broke down, and Google swooped in and closed the deal quickly, just as it has in several recent partnership negotiations