Google and Youtube

Ok, as a blogger I'm obligated to opine about Youtube and Google. After all, everyone else is.

Wow, $1.65B for a 65 person company, less than a year old, with lawsuit written all over it, no profits, little revenue, and lots of customers.

Like most of the rest of the world, I’ve scratched my head on this one. A deal between Youtube and Google makes sense. Buying them? Huh? What did Google really buy, a brand? Maybe, but for $1.65B? Sheesh.

As I’ve blogged before, déjà vu all over again. I’m seeing the same mistakes made 10 years ago during the irrational exhuberance phase of the Internet. But one thing did occur to me… Google could have paid cash for Youtube. And that’s the difference.

When AT&T bought TCI for $70B (yes, B), and then sold it for $47B, it was “well, they can afford that kind of mistake.” Welcome to Web 2.0. Maybe this is what Web 2.0 is really about. Companies that leverage the web to create real, significant cash flow. Google can spend $1.6B and not bat an eye. They will cover that in the next two quarters. It's 1% of their market cap. Heck, the traffic uptick last week alone might have been worth it.