Google Buys CMSReport.com. That's at least what I would have liked this week's headlines to read. Instead, everyone in the business world is still scratching their head and wondering what to make of the Google and YouTube deal. Are we about to enter real growth and value in tech or are we about to face a Dot-Net Bubble 2.0? I don't have all the answers, but it looks like everyone is watching. BusinessWeek has this to say in their article, Smart Move or Silly Money 2.0?
WHO'S NEXT? Now, the question is whether YouTube's valuation will extend to up-and-coming buyout contenders. So far, it looks like only a few sites have demonstrated growth and engagement with users that might command similar prices. Exhibit A: Facebook, whose value as determined by its venture investors has jumped from $100 million in its first round in September, 2005, to $500 million in a second round last April. And that's just the start. Sources say bidders such as Yahoo are willing to pay up to $1 billion today.
So was Google's buy of YouTube smart or silly? Just as the BusinessWeek article discusses in their own article, the answer to that question is anybody's guess. I think if Google bought YouTube only for its young fickle audience and the level of synergy currently present at the site...it was a silly move. However, Google may have also bought YouTube before anybody else could which is likely a very smart move.
If Google fails to see YouTube turn a profit they're out only out 1.5 billion dollars. However, how much loss would Google see in the long run if YouTube had been bought by one of Google's competitor and the competitor succeeded in capturing the online video market? Evidently Google felt the risk was too high if YouTube worked for somebody else but Google.
Whatever the outcome of the YouTube purchase by Google, I'm just glad to see that information technology is back in the spotlight. It's nice to know that IT still matters, whether the critics get IT or not.