Google buys YouTube, the popular video sharing site, for a paltry $1.65 billion. This surprised many industry watchers as Google has typically bought start-ups before they became popular. YouTube has far surpassed expectations of popularity, which is also why the deal seems so large for Google.
Buying YouTube will also bring with it a few interesting problems. The first of which is to figure out how to monetize YouTube in ways other than ad revenue. The video site has grown significantly since is debut last year, largely by word of mouth, but did not have a monetization strategy.
The second issue will be potential copyright lawsuits. Many videos on YouTube can claim a copyright violation; however suing a start-up Internet company may not land a profitable settlement. The settlement from a large, rich search engine may be attractive now. Universal has already threatened to sue YouTube for millions, but was willing to allow videos to be available in exchange for a cut of the ad revenue.
This is the largest acquisition by Google, and it will certainly be interesting to see how YouTube will fit into Google’s larger picture.
Added: Another issue looming over both Google Video and YouTube is that of the “Slippery Slope of Censorship“. Both Google and YouTube have made news by removing “right-wing” videos based on content, yet there are many complaints about radical videos available on both video sites, such as an Iraqi video of snipers shooting at American soldiers. It’s not hard to find a video that would offend anyone; there are plenty of videos based on lampooning religion, ethnicity, political views, and so on. There is a growing organization targeting YouTube because of the political leanings of the censored videos.
However, in an open society where we do have freedom of speech, censoring only a few ideas is worse than censoring all, especially in a “free forum” such as YouTube. Once videos start to be pulled based on political and religious content, there will be no end to the open interpretion of what makes an “offensive” video. Once that happens, the popularity and quality of both video sites will diminish, as users go elsewhere to submit and find videos without censorship.