A few short months ago, the #1 Search giant, Google had acquired YouTube for $1.65 billion. Many industry critics believed that the real winners were the founders of YouTube, Chad Hurley and Jooksing, Steve Chen. The two were able to get Google to spend that amount of money for a company that was just waiting for lawsuits to happen due to the number of copyrighted content that is posted by users of YouTube. One of the most famous vocal critics of this deal was Mark Cuban. See his original post here .
Currently, Google is best known as the engine for advertisers to place their sponsored-search advertisements. As mentioned on Bambi Francisco’s blog Google is planning to change this. Over the course of a few months, Google will be testing video in combination with professionally produced content by Sony Music and Warner Music and advertising. The two music companies will produce their own channels where by Ad Sense customers can embed those channels onto their websites.
With Google expected to earn $4 billion dollars in ad revenue in 2006, these new developments of offering Ad Sense customers to embed these new advertising channels onto their websites, the growing popularity of online video, combined with Google’s relevancy based search results, I think Google got a great deal for YouTube. We may see Googles shares hit the target price of $600/share throughout 2007.