There’s no doubt that Google will face a host of new issues and problems (and, of course, opportunities) once it officially acquires YouTube, particularly in the legal and policy arenas. Although Google has made an earnest effort to beef up its DC representation, Sean Garrett at the463 offers the search giant excellent advice about how to wear a bigger mantel of leadership.
The first skirmishes in the net neutrality wars probably taught Google that Washington’s power trumps even phenomenal market-based success (just ask Microsoft), but the company still hasn’t learned how to handle the political beast. And the sooner Google gets on the stick — preferably before the inevitable backlash begins — the nicer Congress, the Administration and regulatory agencies will be.
But, now that cover photos have been taken and expectations are at their highest, it’s time to buckle down and communicate both a business and policy strategy for the growth of the sector. Clearly, there will be big intersections between the two and the sooner you can talk about the democratizing power of online video and your strategy for respecting copyright while the honeymoon still exists in places like DC, the better off you will be.Posted by Cynthia Brumfield at 8:34 PM | Print | Comments (0)
It’s a done deal, but one that has generated so much blog and press coverage in its anticipation: Google announced today it is buying YouTube, a company founded only in February 2005, for $1.65 billion in a tax-advantaged stock-for-stock deal. The deal-makers held a conference call after the announcement was released to provide more color and details.
“It’s hard for me to imagine a better fit for another company…as far as the platforms that YouTube has built as well as a cultural fit. This really reminds me of Google a few years ago,” Google co-founder Sergey Brin said.
With Google as its parent company, YouTube will develop “a way to harness the power of user-generated content that didn’t exist before,” Chad Hurley, Google’s CEO and Co-Founder, said. YouTube, which had, until recently, insisted it was not for sale, picked Google as the winner in what no doubt was a heated bidding contest because the Mountain View-based search giant will let YouTube be YouTube.
“Those comments [about heading for an IPO] were made because we wanted to remain independent..now working with Google that’s still the case. But now we’ll be able to sharpen our focus in shaping this new media platform,” Hurley said.
YouTube will indeed carry forth and do what it has been doing best, according to Google CEO Eric Schmidt. “It makes perfect sense to continue YouTube as a brand and as a community and as a separate business for Google,” he said.
Google Video will continue as a video sharing service and Google may even step up the somewhat lackluster video option. “Google Video is a very valuable part of the Google experience and in fact it will be integrated even more in Google overall,” Schmidt predicted.
Both companies hinted at bigger and better video things to come. Schmidt said there were more acquisitions in the video sector on Google’s drawing board. YouTube is “one of many investments that Google will be making to make sure that video has its proper place online and in style and worldwide.”
YouTube’s mission is “to create a new media platform for consumers and partners to distribute their media content worldwide,” Hurley said. “This has inspired us to create a new model, a new video platform for content on the web.”
Brin reinforced the dovetail fit between Google and YouTube’s business models, saying that video plays into not only Google’s search strengths but also into the rapidly rising business of video advertising on the web. “Video is a very important part of the world’s information. When you think about search, oftentimes when you want an explanation or understanding of something, what better way to see it than through a video stream,” he said. “Video is a great medium for advertising. From that point of view, we’re really excited about YouTube.”
The big copyright infringement debate didn’t figure all that prominently in the discussion. Both companies say they respect the rights of rights holders and that the deal won’t change much in that regard. If anything, the combined resources of Google and YouTube will likely yield new means of helping copyright holders identify when their content appears in uploaded videos, such as content “fingerprinting.”
YouTube’s new content deals announced today (including one with formerly antagonistic Universal Music) are all steps in this direction, Hurley said.
Bottom-line: This is a huge deal, not necessarily because Google and YouTube will create bigger or better technologies or business models, although that’s likely to happen. It’s a huge deal because, as Google’s Schmidt said during the call, “it’s the beginning of the Internet video revolution,” a defining moment that crystallizes the fact that Internet video is big business. If you thought that Internet video was already a hot sector, just sit back and watch the rush of deals, investments, clashes and carryings-on that will now take place on Wall Street, in Hollywood and in the board rooms of every major communications company in the world.
Posted by Cynthia Brumfield at 5:05 PM | Print | Comments (1)The Wall Street Journal is reporting that Google’s purchase of YouTube could be announced as early as today, after the market closes, although paradoxically the paper is quick to note that the deal still could fall apart. The search giant’s acquisition of the hot video site has to be approved today by the two companies’ boards.
The sketchy details: the purchase price is $1.65 billion (another $500 million tacked on to the price over the weekend?) and YouTube will be allowed to maintain some measure of independence from its parent, keeping its offices, staff and name. If the latter detail is true, smart move by Google.
Meanwhile, both companies each separately announced big content deals this morning. YouTube announced a pact with CBS under which CBS Television Network, its premium television channel, Showtime, and its basic cable/digital media service, CSTV Networks, Inc., will offer short-form video programming from its news, sports and entertainment divisions on YouTube starting this month.
The two companies will split the ad revenue that the new content offerings generate. Moreover, CBS will be the first broadcast network to test YouTube’s new “content identification architecture and reporting system,” which supposedly allows the company to determine if any of its intellectual property has been uploaded without authorization to the web site. If so, CBS will have the right to take it down.
In addition to athletic events from CBS’ CSTV channel, the content to appear on YouTube includes:
—CBS Entertainment; including short clips from top CBS programs including “Survivor,” “CSI,” and “The Late Show with Dave Letterman,” as well as mini-previews and footage from its new fall lineup.
—CBS News; including short videos from “CBS Evening News with Katie Couric,” “The Early Show,” and “60 Minutes.”
—CBS Sports; including analysis of college and professional sports, as well as programming from CSTV
—Showtime Networks, including promotional video clips from its critically acclaimed original series including “Dexter,” “Brotherhood” “Sleeper Cell” and “The L Word.”
Google has struck a deal with Sony BMG Music that will make the record company’s music video collection available at no charge to Google Video users, but with a couple of interesting deal twists. First, Google plans to make the music videos available to its AdSense publisher network, presumably to allow sites to publish the videos from an automated feed. (Why AdSense publishers would want to publish music videos is a little unclear to me.)
In addition, Sony and Google will work together to launch a user-generated service that allows users to access certain Sony copyrighted songs when creating their own content. This permission-based copyrighted material access dodges altogether the need to detect unauthorized use, at least for the content Sony makes available under this part of the deal.
Like CBS and YouTube, Sony and Google will split the advertising revenues from their agreement.
Update: Google added another music company deal to its action-packed day. The emerging online video titan has a pact with Warner Music Group. The deal seems to mirror the Sony-Google deal in most respects, although Warner will also be making videos available for sale at Google Video.
Posted by Cynthia Brumfield at 11:18 AM | Print | Comments (0)
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