Will Google Buy YouTube?

Rumours are flying that Google and YouTube are talking turkey. Or is it just hype?

Google is probably one of the few Internet heavy-weights capable of pulling it off. The 1.6 billion dollar price tag is out of my reach, but not Google. In addition to the price tag you would have to assess your ability to pay the 2 million dollar bandwidth bill every month. So in part it makes sense when Google has the infrastructure and the capital to prop up YouTube. However, there are other considerations that any investor is going to have to think about before signing on the dotted line, such as profitability and copyright problems that seem to follow YouTube like the plague.

To say that YouTube is:

…notoriously unprofitable…

Seems a little misguided as you need to be trying to make money in order to be labeled unprofitable. I have long maintained that YouTube is making poor effort on this front, great for users not much good for paying the bills. Without a doubt YouTube has huge potential for profit and marketing opportunity. With over 100,000 downloads per day, excluding straight “hits” to the homepage; there has to be the potential to be profitable. With Google’s extensive advertising base they have the tools, knowledge and skills to make it happen. Perhaps where there has been no substantial business model Google sees “virgin” opportunity and dollars, maybe enough to fight off the lawyers that will turn up.

The copyright problems that are plaguing YouTube at present are a definite deterrent to any potential investor as they would inherit these problems. We all know that there is bugger all on YouTube that is not copyright in one way or another and with record companies saying things like:

“…Universal Music Group has taken a rather dim view of YouTube’s activities. CEO Doug Morris has painted YouTube and MySpace with the copyright-infringer brush, saying that they “owe us millions of dollars” for infringement.”

Investors are going to be more than cautious about snapping up YouTube if it means inheriting a lawsuit for millions of dollars. Having said that they also inherit a deal with Times Warner that could lead to bigger and better things. I’d love to put that into perspective but the details are still a big secret.

So rumour it might be at present, but that is my take on what it all might mean and only time will tell as to if Google will shake on any deal with YouTube.

Check out The Global Geek Podcast this week as we touch on YouTube and it’s future.

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