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Google Buys YouTube -- And So?

What's It Mean to Your Average Surfer?

By Martin H. Bosworth
ConsumerAffairs.com

October 10, 2006
It was the shot heard 'round the technology world as search engine king Google announced it was buying video sharing site YouTube to the tune of $1.6 billion in stock.

Both companies' CEOs touted the move as a way to take advantage of the others' strengths -- Google can utilize YouTube's huge popularity and massive potential advertising base, and YouTube can swim in their new corporate parent's deep financial pockets.

But what does it mean to you, the everyday user who uses Google to search for information, or use YouTube's endless selection of video clips to waste time at work?

The chief concerns of YouTube fans are that Google may start charging viewers to watch or share content they could formerly access for free, and that major media conglomerates might be more tempted to sue YouTube users for violating copyright when posting content such as music videos, film clips, and so on.

This would drive many fans on to the next "cool" or free site, much as file-sharing site Napster was litigated into becoming a for-pay (and much less popular) service.

YouTube CEO Chad Hurley assured skeptics that the company would continue to operate independently, and without any major changes.

In a video posted on YouTube, Hurley said that "we are gonna stay committed to providing the best…most innovative service, and developing new tools and technologies for you to keep having fun on our site."

As part of the strategy to avoid the predicted mountain of copyright lawsuits, YouTube announced it had cut a deal with CBS to enable sharing of CBS News clips in exchange for a cut of advertising revenue. Google announced a similar deal with Sony BMG for its own Google Video service, a deal which may be extended to YouTube.

YouTube co-founder Steve Chen also talked up the company's new "flagging" technology, which purportedly enables identification of copyrighted content for quick and easy removal.

Although companies such as Universal have complained about the heavy sharing of "unauthorized" content on YouTube, the company has been able to avoid potential lawsuits by promptly complying with requests to remove videos, and because it simply didn't have the money to be a worthwhile lawsuit target. With Google's ten-league pockets backing them, that may change.

Advertising is going to be key for making money from the massive joint venture.

YouTube fans are accustomed to accessing the site's purported 100 million-plus videos for free, and without a subscription system to make money from the content, the company is going to rely on getting users to click on ads in order to generate revenue.

Critics complained about the $1.6 billion price tag for the sale, saying that YouTube had yet to find a way to make money from its video hosting, and that the sale was reminiscent of the late-90's "dot-com boom," which eventually led to a huge bust and the shuttering of many businesses.

As a sign that Google is hedging its bets, the company claimed that its own Google Video service would stay active, though YouTube users would not have to sign up with Google in order to continue using YouTube.

Google recently suffered a minor embarrassment when hackers took advantage of a flaw in the company's Blogger service to post an unauthorized entry to the company's own blog. The hackers claimed the company was canceling a "click-to-call" advertising service developed in conjunction with sometime Google ally eBay.

For now, it seems that YouTube fans have nothing to fear, and can continue to enjoy the hordes of dancing monkeys, sleeping kittens, and stupid human tricks that make up the bulk of the site's video content.

As to what may come in the future, both companies are wisely choosing to wait and see what presents itself.

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