Google in talks to buy YouTube

[FreaK]

Friday, 06 October 2006

Search engine giant Google is in talks tobuypopular Web video site YouTube. For an outrageous price of close to 1.6 billion dollars. The Wall Street Journal reported earlier today.

A spokeswoman for YouTube could not be reached for comment. A Google spokesman said, "We don't comment on rumors and speculation." Rumors of such talks were reported earlier on the TechCrunch blog.

YouTube, founded less than two years ago, has seen surging popularity, with users watching more than 100 million videos per day.

A purchase of YouTube could give a big boost to the online video efforts of Google. YouTube commanded 46% of visits to U.S. online video sites in August, according to market research firm Hitwise. That compared to a 23% share for the video activities of News Corp.'s MySpace social-networking site, and 10% for Google Video.

Last month, the company announced a new system to give media companies more control over the video on the site and to address their fears that others will profit from consumers' piracy of their content. Warner Music Group is the first entertainment company to embrace the system. It will post its catalog of music videos on YouTube and collect an unspecified percentage of the revenue from advertising appearing alongside them.

If Google buys You Tube, Google will put its competitors even further behind. Acording to an article in Business Week, in August, Google sites gained 6.8 percentage points of search share from a year earlier, according to researcher comScore Media Metrix. Meantime, Yahoo lost 1 percentage point, Microsoft's sites lost 3.3 percentage points, and Ask.com lost one-half of a percentage point.

Due to Googles gain in searches and the rumors of Google buying web video site You Tube, Shares of Google recently went up 0.5%, to $413.91.

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FreaK