Google to buy YouTube for $1.65 billion

[ZeoBandit]

Google to buy YouTube for $1.65 billion

By Paul R. La Monica, CNNMoney.com editor at large
October 9 2006: 4:19 PM EDT

NEW YORK (CNNMoney.com) -- Google, the Internet's leading search engine, announced Monday that it is buying popular online video site YouTube for $1.65 billion in stock.

YouTube, which was founded in February 2005, has quickly become the most well-known of several online video sites. More than 100 million videos, many of which are short videos created by the site's users, are downloaded a day on the site.

According to Internet research firm Hitwise, YouTube has about a 46 percent share of the online video market.

For Google (Charts), the purchase of YouTube gives the company the ability to tap into the potentially lucrative online video and social networking markets. Some analysts have criticized Google for relying too much on advertising tied to keyword searches.

The combination of Google and YouTube could further strengthen Google's dominance in online advertising, giving it an edge over rivals such as Yahoo! (Charts), Microsoft's (Charts) MSN and News Corp (Charts)., which owns the social networking site MySpace. Some analysts said Monday that Yahoo, Microsoft and News Corp. also had probably expressed interest in buying YouTube.

Reports of a deal first began to circulate on Friday. Shares of Google rose about 2 percent on the Nasdaq Monday after posting a similar gain on Friday.

[WinterlessIceness]

For a company which revenue is $6.138 Billion it's a neat addition. What's quite surprising is that youtube turns out to be 3 times more expensive than myspace.

[Kevy5150]

Just as long as they keep those VH videos on there, I couldn't really care less who owns it.

[FORD]

It was inevitable, but this blows. Youtube has already been slowing down lately, due to the RIAA fascists sucking all the bandwith on their NAZI censorshit patrols. Now with Google owning it, they'll probably switch it all to the Google video format which is even shittier for streaming. At least Google let's you upload something longer than 5 minutes though, so it's not all bad news.....

[billy007]

I gotta imagine that a lot of the copywrited material is gonna start disappearing soon.

[FORD]

I gotta imagine that a lot of the copywrited material is gonna start disappearing soon.

It already has been. I lost a few of my own.

[ZeoBandit]

YouTube founders split $650M payout
Web search leader Google details the payout from its $1.65 billion acquisition of the popular online video service.
February 8 2007: 6:34 AM EST

SAN FRANCISCO (Reuters) -- Two of YouTube's founders stand to divide shares of stock now valued at around $650 million, Web search leader Google Inc. said in a regulatory filing Wednesday detailing the payout from its $1.65 billion acquisition.

Chad Hurley, chief executive of the online video sharing phenomenon YouTube, received 694,087 shares of Google (Charts) common stock worth around $326 million, according to the Securities and Exchange Commission filing.

Co-founder Steve Chen received Google common stock valued at a similar amount, including 625,366 shares directly owned and another 68,721 shares held in a trust.

A digital peacock ruffles its feathers
Sequoia Capital, the sole venture capital backer of YouTube, stands to receive around $442 million in Google shares based on the $470.01 closing price of the Web search leader Wednesday.

At least two dozen YouTube employees received lesser share amounts. For example, Julie Supan, YouTube's principal spokeswoman, received 10,308 shares worth around $4.8 million.

Most of the remaining shares were divided up among dozens of limited partner investors in Sequoia Capital.

Elite backers
These include a who's who of the endowments of Harvard, Yale, Brown, Columbia, Oxford and other elite colleges, and the investment vehicles of the families behind the Getty (Charts), Hewlett-Packard (Charts) and Intel (Charts) fortunes, among other beneficiaries.

The third co-founder, Jawed Karim, received stock valued at around $64.6 million. After starting the company in early 2005, he backed out and returned to Stanford University to work on a graduate degree in computer science.

The three co-founders had met while working together at online payments company PayPal, which was later acquired by Web auction company eBay Inc (Charts).

The Web, camera and texting in fitting room
Google, of Mountain View, Calif., acquired YouTube, which is now located in Brisbane, near San Francisco, in November of last year.

YouTube enjoyed explosive growth during 2006 among viewers eager to watch short-form comic sketches created by other users. But its also has faced mounting legal threats from big media companies angry that the site has become a popular means of pirating their television shows.

Google had said at the time of the deal's closing three months ago that one-eighth of the equity, or around $200 million, would be held in escrow as security on unspecified indemnification obligations.

Last week, Viacom Inc. (Charts) , owner of MTV Networks and several popular comedy programs often pirated by YouTube fans, demanded that the Google unit take down some 100,000 video clips of Viacom programming.

[mistershow]

wow, it's nuts to see how much money people are paying for things like this.