More on Googtube
Six months after Google's acquisition of Youtube, Mark Simon at SearchInsider decries Google's Shaky Investments, arguing that Google overpaid for Youtube and still lacks a revenue model to support the $1.65b valuation.
Two thoughts:
1. Paying $1.65b for the market leader in a rapidly growing segment of the internet when you're worth $175b is no big deal. In fact, I'd argue it was probably cheap when viewed in the slightly longer term.
2. Google itself did not initially have a revenue model. Rejecting VC pressure to run banner ads, Google waited until the advent of the PPC auction model (by GoTo / Overture) several years later to begin monetizing the enormous traffic volumes it was generating. The Google team are wisely repeating the same strategy: focus on the user experience while waiting for an ad model to emerge that doesn't screw up that experience.
Two thoughts:
1. Paying $1.65b for the market leader in a rapidly growing segment of the internet when you're worth $175b is no big deal. In fact, I'd argue it was probably cheap when viewed in the slightly longer term.
2. Google itself did not initially have a revenue model. Rejecting VC pressure to run banner ads, Google waited until the advent of the PPC auction model (by GoTo / Overture) several years later to begin monetizing the enormous traffic volumes it was generating. The Google team are wisely repeating the same strategy: focus on the user experience while waiting for an ad model to emerge that doesn't screw up that experience.
Labels: advertising, Google, Youtube
posted by Moses Kagan at
9:10 AM
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