Rumor Of The Week: Google To Buy Youtube

Rumor Of The Week: Google To Buy YouTube
Jason Lee Miller | Staff Writer

TechCrunch's Michael Arrington rates his own rumor at about 40
percent likely, just so we get that out of the way. The "completely
unsubstantiated" rumor is that Google is finalizing talks to acquire
web video phenomenon YouTube.

Arrington received the information via email, confirmed the rumor
and the price ($1.6 billion) with venture capitalist firm Sand Hill
Road. Earlier reports have valued YouTube, which streams about 100
million videos per day, as high as $2 billion, even with its
million-dollar-per-month bandwidth fees.

The commentators at TechCrunch are split on the rumor, some calling
it "ludicrous," others exploring the possibilities of why it would
make sense for Google to acquire YouTube. The first thought, at
least from here, is that Google has to do something with all that
cash.

"Google is sitting on huge amounts of cash," says Sebastian Borek,
"their shareholders demand Google to continue their story. Also the
Internet is a winner take it all business, that by nature drives
consolidation of the market - sometimes earlier then expected."

It's no secret that Google has been moving from search engine
company to media company, and controlling a market like the one
YouTube commands would play straight into that strategy. Adding
YouTube to Google Video would give Google tremendous video market
share, adding to their search dominance.
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