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October 10, 2006
Some thoughts on the Google Purchase of YouTube:
So it turns out that YouTube never had to turn a profit in order to be sold for $1.65 Billion. Such is life in Silicon Valley in 2006. And while there are a few other YouTube "me too" plays out there, there is just one YouTube and it is now owned by Google. It was nice to see YouTube prove that in 2006, the Field of Dreams, "if you build it (traffic), they will come (an exit)" business model is alive and well.
(The thoughts that follow assume that Google will figure out the solution to all of the underlying copyright issues that YouTube will be facing in the future.)
Usually we don't see revolutions until after the fact (oftentimes many years after the fact and only after years of analysis and digestion). I suspect that historians might come to recognize yesterday's announced acquisition of YouTube by Google, as one of the great indicators of the effects on the Internet on the historic transformation in the world of Media and Entertainment. The move by Google in purchasing YouTube has the chance to be transformational; but it will be up to Google to demonstrate its ability to overlay its own business model into the bottom up community represented by YouTube. This acquisition also demonstrates the power of the new media establishment, which now includes Google, eBay and Myspace and the ability of these new conglomerates with the power to gobble up ideas created at the edge. I have to wonder whether the YouTube team will be able to continue to innovate as part of a larger corporate establishment, even if they are kept together as a brand and as a core team.
YouTube comes from a place where it knows about community; how to build community, and how to enable end-users within its community to share videos and common experiences. I wonder how much of this "community experience" will transfer over to the culture within Google. While Google could easily add a rich IP-based communications capability to YouTube -- including IM, voice and presence applications it will be interesting to see how far Google goes in the future to incorporate YouTube into its core assets and core offerings.
Companies like YouTube that live in the "bottom up" space know what people want -- and now, via Goggle's enabling technology, can deliver the applications that people may really want. By improving the ability of YouTube users to "see" others "presence" with GoogleTalk, the effect could be the evolution of the overall user experience.
And if you take the elements of Google, including their micro-payments capability, and the IP-based communications capabilities of GoogleTalk and now YouTube, we may be seeing the formation of a fully functional next generation "TV Network of the Net." Google could very likely deliver contextual advertising in those videos, thus proving a way to drive revenue through even the stupidest pet trick video. While I have been looking elsewhere, Google might be the first to be able to deliver on the vision I shared at Fall 2006 Video on the Net and be the ones to first deliver the "digital popcorn" and platform for the future of TV. Given the Google DNA this is a possibility...but it may take someone else to turn this into a reality.
Tags: YouTube, Google, Video on the Net, VoIP, Presence, Jeff Pulver
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Posted by jeff on October 10, 2006 07:55 AM | Permalink
Additional resources: Watch PrimeTime TV Shows | Watch the Jeff Pulver Show | Jeff's Qik Videos
Comments
I don't know about the H264 and MPEG4... You can just do so much more with Flash flv and the quality is not really an flv issue it was what it was compressed like before that's the problem... I suspect.
Hey, here's a poll we did where you get to predict if people will think it is a good idea for Google and then also vote at the same time: http://www.tapoll.com/poll/id/594706440 Give it a try!
Posted by: Dan Zen at October 14, 2006 01:00 AM
Google has the revenue model and the monetization experience that the YouTube team clearly didn't have, or didn't have in abundance. I would also imagine their existing deals with networks will go a long way towards smoothing over intellectual property issues as well.
H264 and MPEG4 video will likely increase in prominence now that Google has acquired YouTube. In addition to being better quality video, these are (or can be) headerless formats, which means that Google can introduce a system similar to Podshow's DGAP technology.
For that matter, so can Network2.tv. Food for thought!
Posted by: Christopher S. Penn, PodCamp Co-Founder at October 10, 2006 08:13 AM