Google Nabs YouTube For $1.65bn

Will not be subsummed into Google Videos.

The homogenisation of the Internet continues this week after wildly successful video sharing start-up YouTube was bought by Google for $1.65bn (£883m).

The all stock deal was announced late yesterday and is bar far the largest purchase in Google’s history. Interestingly, the two sites will continue to operate independently despite the fact Google runs a competing site: Google Videos.

In spite of this, Google Chief Executive Eric Schmidt described the two companies “natural partners” and claimed YouTube will be just the first of many investments Google plans to make in this sector. In traditional YouTube style, however, creators Chad Hurley and Steve Chen posted their comments in an informal video on the site here.

The sale completes a remarkable rise for YouTube which launched just 20 months ago and has yet to turn in a profit. In one year the site has seen figures skyrocket from 2.8m users to 72m users as of August 2006 and 100m videos are watched on it every day.

How the Google purchase will affect YouTube at this stage remains unclear but the site is clearly in an evolutionary state with the first ads starting to appear above video broadcasts and newly inked copyright deals in place with Universal Music Group and CBS.


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