It’s now almost official that Google will buy Youtube for a whopping 1.6 billion. They’ll announce it after the close today. Here’s the NYT take on things. I’d have listened to Mark Cuban because it seems to me he’s in a very unique position to analyze the prospects here, but they didn’t and soon Google will have a huge video footprint. Google Video has about 1/4 the traffic of Youtube. Combined I think they’ll dwarf the competition – at least initially, though this market, which should really be called “American’s stupidist and most mundane home videos” is still in it’s infancy.
It’s not clear to me that people will continue to spend hours and hours surfing and watching for the few gems in an ocean of crappy short clips but Google seems to think so, and it’s also true that there is an enormous amount of advertising money now spent on network TV that may flow to this venue. Google’s recent talk about NOT producing their own content and moving into offline advertising venues may relate to this decision – they want to become a key source to soak up as much of the dumb money now spent on extravagant, low ROI offline campaigns.