So the
Wall Street Journal piece today saying that
Google is in talks to buy
You Tube has understandably got quite a lot fo attention. A few things pop out here. First if You Tube does sell then Google really is the most logical buyer. Google's cutlure and business model is ideal. The other potential suitors seem less of a fit andf have already put forward alternatives. I'm referring to the likes of
Microsoft and
Yahoo!. I guess the question is will they sell? If you were a founder would you cash in now? The same questions were clearly in the minds of the
Skype guys. In their case
eBay paid $2.3Bn for the business. At that price I think it was likely an easy decision. You Tube is apparently being offered $1.6Bn. This seems relatively cheap to me (the emphasis being on the word 'relatively'). Truth is the numbers at this level are not tied to sales or profits they are tied to 'how much can you justify to investors.' It is very clear that You Tube is a high growth company in a high growth area. On that score if this deal were to open up a rapidly growing $10Bn market for Google then a price of between one and two billion dollars doesn't sound that bad. Does it?
2 comments:
I found a good mashup of the two internet giants, http://www.gootube.net
Youtube may eventually turn out to be the biggest waste of money ever.
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