Stupid Idea, Has a Life of Seconds

Found out today that there is a new company called The Pudding in private beta. Nothing new there. They are offering free PC based calls. I can only presume that this implies PC to landline calls. Great, excellent. But we all know that there is no such thing as a free lunch. But sure we can put up with the odd advert or pop-up if the product is worth it. But the product better be good. In this instance I don’t think any product would be good enough.

The price of the free calls is that you agree to let the company listen into your conversations and then deliver contextual advertising based on what you are talking about. What the heck are they thinking? This has got to be the worst business model I think I have ever heard.

In this era where people are as paranoid as ever about issues such as privacy and identity and all that goes with it, a company has decided to “bet” that people are going to be willing to give all that up for what? Free phone calls! Stupid idea. It just is not going to happen. That opinion comes without even exploring the idea of advertising which quite frankly I could do without and would rather pay for a service that comes ad free. But that is me.

Stupid name stupid idea, and that is going straight into the broken egg pile here at the chicken coop.

The Pudding Screenshot

Via: Silicon Alley Insider


Google Acquires YouTube

YouTube LogoThis is hot off the press, I am listening to the conference call press release as I write this. It was announced today that Google has indeed acquired YouTube.

It has been reported that once finalised YouTube will retain it’s unique brand identity. YouTube willGoogle Logo continue to be based in San Bruno, CA, and all YouTube employees will remain with the company. There is a lot of talk in the conference call press release about the advertising potential of YouTube and the reach of the YouTube brand.

Eric Schmidt, Chief Executive Officer of Google:

“The YouTube team has built an exciting and powerful media platform that complements Google’s mission to organize the world’s information and make it universally accessible and useful,”


“Our companies share similar values; we both always put our users first and are committed to innovating to improve their experience. Together, we are natural partners to offer a compelling media entertainment service to users, content owners and advertisers.”

Chad Hurley, CEO and Co-Founder of YouTube:

“Our community has played a vital role in changing the way that people consume media, creating a new clip culture. By joining forces with Google, we can benefit from its global reach and technology leadership to deliver a more comprehensive entertainment experience for our users and to create new opportunities for our partners…”

This was a stock deal and the final number of Google shares that will be distributed is yet to be finalised.

“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.”

Also announced are new relationships with big brands like SONY, Universal and CBS along with existing deals with the likes of Warner. The aim is that these partners will be to track their content with digital fingerprinting and taging. We have been advised to expect keyword and content searches within one month. As to how these partners will be involved with YouTube was not disclosed. I also thought it ironic considering Universal’s opinion of YouTube.

“…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.”

Perhaps they are going to make it up to them, a sweetener perhaps?

Integration of powerful searching within YouTube is touted as one of the benefits of a relationship of YouTube and Google. This was repeated numerous times in the press release conference call and it appears that it will be one of the priorities in the development of YouTube.

Google’s response as to why they have acquired YouTube when they already have video: Google video is doing very well and maintains good partnerships, volume and content that will be enhanced with YouTube. Added was the fact that YouTube offered a more social community that was being done in a way that was unique and open to further development. This hints that it may come to pas that YouTube content will be available on Google Video. The attraction of the social aspect of YouTube is one that certainly appeals to Google as they have executed social networking quite poorly in the past.

In the last twenty four hours the two parties have formed a long list of potential integrated changes, these ideas were not made public. However, advertising systems and the expertise that Google will bring to the deal in this regard was mentioned repeatedly. Google’s advertising platform would create a new model for content delivery and that video offered an excellent opportunity for advertisers. It was clarified that much experimentation is required in regards to advertising strategies and making YouTube a profitable business. Don’t look now but this clearly states that we can expect the advertising to be far more aggressive on YouTube with this acquisition that previously. But will Google do it right? Time will tell.

When asked where is the bulk of profit was expected to come from after the deal has been finalised: No comment.

When asked what the expected revenue share or outlook as to partners benefiting from the deal: No comment.

When asked as to the valuation of the deal: No comment.

Copyright came up only once during the press conference. It was asked what influence copyright had on the acquisition for Google. The stock standard answer was regurgitated from both parties. That they respect the rights holders rights and they will focus on it with the added resources that Google brings, working with content owners to protect their work. Nothing further. They also “protected” both Google video and YouTube under the Digital Millennium Copyright Act. The act is a large document but they are referring to the section that protects them as hosts of user submitted material. That means that the business or host of the material is not liable but the infringer of copyright is, that is the person that put it there. This response seems to suggest that the status quo will remain and that content will not be torn down. Having said that, if it was taken down I doubt that there would be much left.

It is reported by Google that the deal will close within this fourth quarter as all approvals have been meet and there is nothing preventing the deal going through.

YouTube has long said that it is not up for sale and that they are not in talks, when questioned about this they responded by saying that they wanted YouTube to remain independent and develop it to be better for users in the way that they wanted. Google they believe and the structure of this deal will enable them to “…sharpen focus”, and the combined experience and resources of Google would give them what they needed to accomplish this goal.

When asked about the integration of Google with YouTube they responded very strongly that the brand “YouTube” would remain as it was a known brand that brought with it power and strength. It was this that added value to the community, users, and advertisers, said Google. I suggest you to add to that advertising potential and with it money.

In closing I was taken by the phrase referring to the deal that this was:

“…next step in the evolution of the Internet.”

It might be Google’s next step and at this time both parties are quite excited about the potential. But with the rather large stick that Google wields, I would suggest that YouTube has changed forever in ways that only time will tell. according to the press release, expect something within the next month. But it might not all be good.

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.