Google buys YouTube

 

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By Steve Malone

Posted on 10 Oct 2006 at 10:18

As predicted, the search engine Google has acquired the video-sharing site YouTube for $1.65 billion in shares. Google says it will continue to keep YouTube going as a standalone unit.

YouTube, with just 47 employees, was only formed in February 2005 by Steve Chen and Chad Hurley. Since then its growth has been phenomenal with an estimated 65,000 new videos uploaded every day and some 100 million downloads to a worldwide audience. The web monitoring firm Hitwise estimates that YouTube accounts for 60 per cent of all the videos viewed on the Internet.

The acquisition follows the flurry of agreements with media companies announced just yesterday, which lifted the threat of YouTube being sued for copyright infringement. The other big issue with YouTube is how to make money from its audience without making the site overly commercial and alienating the kind of gonzo film making that has made it so successful.

One answer is clearly the 'brand channels' that YouTube is introducing to hold the content from the more respectable media companies. In addition, Google and YouTube are now talking about new opportunities for professional content owners to distribute their work to a new audience. The strategy appears to be extending the AdSense programme to YouTube.

Every video posted will have the chance to make money for its author by the chance to put sponsored ads alongside. Considering the traffic some of these videos get, there is a chance for film directors to make a good return on their efforts.