...copyright infringement lawsuits begin in 7... 6... 5...

October 9, 2006 1:46 PM

Google buys YouTube.$1.65 billion dollars is enough for Google to buy the number one video streaming site on the net.
posted by andreaazure (118 comments total)

Holy crap, that's awesome! I am a huge fan of youtube because I really think it changes the internet for the better, making sure that people don't have to pay for video bandwidth anymore.

I'm curious how they'll pull it into the fold though. Merging it directly into Google Video would kill a lot of its personality, but keeping it separate would probably not allow it to fully take part in the insane Google infrastructure.
posted by mathowie at 1:51 PM on October 9, 2006

youtoogle.com
posted by KevinSkomsvold at 1:51 PM on October 9, 2006

I don't get it. They can either let people keep posting infringing clips, or they can crack down and drive people to other services. Somebody please explain the reasoning behind this.
posted by keswick at 1:52 PM on October 9, 2006

If only Pooln had bought the site, they could have called it Pootube.
posted by tapeguy at 1:52 PM on October 9, 2006 [1 favorite has favorites]

I can think of no website that had as immediate an effect on people who ordinarily dont give a monkeys about the t'internet as Youtube. I wonder what will change, if anything?
posted by ClanvidHorse at 1:55 PM on October 9, 2006

Somebody please explain the reasoning behind this.

At this point, with YouTube having made zero profit, I think the reasoning is, "We're not sure what to do with it, either, but we'd better make sure nobody else gets it."
posted by mediareport at 1:56 PM on October 9, 2006

I really don't get it either, but I guess this validates YouTube's business plan...
posted by anthill at 1:56 PM on October 9, 2006

GooTube!
posted by clevershark at 1:56 PM on October 9, 2006

Official press release from Google.
posted by ijoshua at 1:58 PM on October 9, 2006

Bubble 2.0
posted by empath at 1:58 PM on October 9, 2006

YooooooooooouTube >
1 2 3 4 5 6 7 8 9 10 Next
posted by Mwongozi at 1:59 PM on October 9, 2006 [5 favorites has favorites]

Addendum: The real value in the Net in coming years, I think, is going to be in information gathering/data mining about user habits. In that respect, getting the big social networking sites under your wing, in the hopes that someday you can make all that behavioral and demographic data pay off in the future, looks like a smart bet.
posted by mediareport at 1:59 PM on October 9, 2006 [1 favorite has favorites]

*Noise that Jon Stewart makes when he reads something particularly puzzlings that sounds a little bit like jowl-flapping and a little bit like a dog barking after getting smacked on the nose.
posted by boo_radley at 2:02 PM on October 9, 2006

In all seriousness, I think the next step is for them to unload Orkut to a Brazilian company and turn Youtube into their Myspace killer.
posted by empath at 2:03 PM on October 9, 2006 [1 favorite has favorites]

Busy day for YouTube: YouTube signs up Universal, Sony BMG, CBS. That should help with the copyright issues.
posted by brain_drain at 2:05 PM on October 9, 2006

clevershark: as in "You can just suck my GooTube"?

Anyway, I bet Google has a reason for this, but the copyright fights will come. If they are smart, there will immediately be a way for users to flag things as copyright violations.
posted by Kickstart70 at 2:06 PM on October 9, 2006

Google stock is up 2%. The acquisition cost 1.2% of their market cap. Not bad.
posted by smackfu at 2:06 PM on October 9, 2006 [1 favorite has favorites]

Recipe for Success

Combine the following:

1. The largest single copyright infringer on the Net;
2. Absolutely draconian copyright laws in the United States;
3. A company with a market cap in the hundreds of billions;
4. An RIAA that is willing to press suits against grandmothers and dead people.

Shake, do not stir. Cook in court until done. Serves many, many record industry executives great heaps of fork-tender cash.
posted by Malor at 2:07 PM on October 9, 2006 [2 favorites has favorites]

I'ts a good idea: Google video for serious content, YouTube for kids lighting farts on fire. The copyright issue really isn't a serious problem, cause if the tv industry cracks down - all sites, not just YouTube will be forced to stop. Even without copyrighted stuff - YouTube will still be the leading provider of videos of kids lighting farts on fire.
posted by JoddEHaa at 2:08 PM on October 9, 2006

I don't get it. They can either let people keep posting infringing clips, or they can crack down and drive people to other services. Somebody please explain the reasoning behind this.

Google isn't particularly sensitive to protecting copyrights. My guess, though is that Google realized that YouTube was doing streamed video much better than anyone else, much like when EBay bought PayPal because PaytPal was so much better than EBay Payments.
posted by solid-one-love at 2:10 PM on October 9, 2006

I do wonder why ifilm didn't make it. They were there before youtube I think
posted by jouke at 2:14 PM on October 9, 2006

I guess this validates YouTube's business plan...

What business plan? Do they have one beyond "Hey, we got all these eyeballs over here!"
posted by mediareport at 2:14 PM on October 9, 2006

If you can't beat 'em, buy 'em! Wait, who usually says that? Microsoft? or was it Apple?
posted by tomplus2 at 2:16 PM on October 9, 2006

Awesome news. I hope they just make it into google video. The interface is better.
posted by riotgrrl69 at 2:16 PM on October 9, 2006

I think it's brilliant on Google's part. Google has mastered the unobtrusive ad and once it figures out a way to index video content it'll be able to give YouTube a functional search system as well as do proper context-sensitive ads.

Not to mention it's all more grist for the Great Google AI.
posted by Skorgu at 2:17 PM on October 9, 2006

Malor: The scenario you describe is unlikely. Three of the big four music labels recently inked deals with YouTube, so they aren't going to sue. The fourth (EMI) is likely to do the same very soon so it keeps up with its rivals. That leaves no major player in the music industry to bring a lawsuit.

Companies in other fields (music, TV) could still sue, but I would wager that YouTube is busy trying to sign deals with them, as they have with some already. Media companies are finally understanding that they are better off in the long run if they partner with distribution services like YouTube rather than sue them.
posted by brain_drain at 2:19 PM on October 9, 2006

Youtube's got pretty good deals worked out with lots of major copyright holders, including NBC, CBS, Universal, and Sony BMG.
posted by stammer at 2:20 PM on October 9, 2006

For above, read: what brain_drain said.
posted by stammer at 2:21 PM on October 9, 2006

other fields (music, TV)

Correction: I meant "other fields (movies, TV)"
posted by brain_drain at 2:22 PM on October 9, 2006

If Google cuts out infringing video, some other couple of crazy kids will start their own YouTube. Rinse and repeat.
posted by NationalKato at 2:22 PM on October 9, 2006

I'm getting into venture capital - Sequoia just made upward of $480 million on an investment of $11.5 million. In less than 18 months.

And even that is nothign compared to the $4.7 billion they made by investing in Google.
posted by tapeguy at 2:24 PM on October 9, 2006

What business plan? Do they have one beyond "Hey, we got all these eyeballs over here!"

The plan seems to be to own video on the web or bust, and by golly they seem to have done it - between the takeover, and the deals with the major media companies, they are primed to take the throne as the web video site. I think its reasonable to say that that eclipses any short-term losses.

When you consider the amount of media that is inevitably going to make it to the web in time - all of TV, film, independent stuff and so on, to be positioned as the natural home of TV/video/film on the web is inestimably valuable, with colossal room for growth. Unless someone makes a major mistake, Google/YouTube are set to make an arse-load of money (especially when you consider the ever-falling cost of bandwidth/storage, and Google's expertise in the matter).
posted by MetaMonkey at 2:25 PM on October 9, 2006

Eventually Google and Yahoo are going to merge it is inevitable. Once all the major Web 2.0 sites are picked up by one or the other, there's nothing left to do but that.
posted by stbalbach at 2:26 PM on October 9, 2006

The never talked about Yahoo! Video just slipped further into obscurity.
posted by birdherder at 2:26 PM on October 9, 2006

Actually the acquisition makes a lot of sense. Google dumped a lot of development money into its video system, only for it languish for various reasons. They probably took a look at the costs for catching up with YouTube at the application level, then at the marketing costs just to catch up with YouTube, then figured 'Fuck it, why pay at least a billion just to catch up with the leader when we can just buy the leader?' Since they make money with advertising, they need eyeballs, and a LOT of eyeballs hit YouTube everyday.
posted by Vaska at 2:26 PM on October 9, 2006

Maybe Google should buy TimeWarner and then...

oh wait. Never mind.
posted by spilon at 2:28 PM on October 9, 2006

Also, what with the caching of content, book scanning and so forth, Google is uniquely qualified to handle all the niggling copyright issues, which I suspect will now simmer away thanks to Google's position as the biggest, coolest kid on the block that everyone wants to be friends with.
posted by MetaMonkey at 2:30 PM on October 9, 2006

I really don't get why everyone focuses on the copyright infringement stuff with the YouTube business model. If YT were going to be sued out of existence for hosting Doctor Who/Battlestar Galactica/Peanuts & Outkast mash-ups/SNL sketches/Chili Peppers videos/movie trailers/Keith Olbermann editorials/and so forth, it would've happened by now. Instead, copyright owners have either decided it's not worth the hassle or made deals with YouTube. What's going to change? Is there something currently not being posted to YouTube that is more dangerous, litigation-wise, than what's being posted there now?
posted by aaronetc at 2:33 PM on October 9, 2006

Google is the only near-monopoly I love
posted by juliarothbort at 2:36 PM on October 9, 2006

Vaska basically has it.
Google's advertising growth for several years has been nothing short of stupendous -- on the order of 25% quarter to quarter (not year to year). It has slowed a bit in the last few quarters but is still hot. And, they have hardly scratched the surface -- no banners or tiles, just little text ads. They need places to put it all. YouTube is a good place.
posted by beagle at 2:42 PM on October 9, 2006

I'm just glad I got in on the ground floor of this "tube" thing.
posted by Tube at 2:44 PM on October 9, 2006 [1 favorite has favorites]

I for one welcome our new G--

Wait, am I too early?
posted by dirtynumbangelboy at 2:44 PM on October 9, 2006

metamonkey, do i detect the governator's accent in your post?
posted by joeblough at 2:51 PM on October 9, 2006

YouTube doesn't have a monopoly on all the videos^NSFW.
posted by Jimbob at 2:52 PM on October 9, 2006

I always wondered why Google video seemed to be in some sort of do-nothing holding pattern after it launched. Maybe they thought it would be easier to buy Youtube than compete with it. Seems like a very M$-like business strategy, though.
posted by ninjew at 2:55 PM on October 9, 2006

Mark Cuban Scoffs at Google, YouTube Situation.
posted by ericb at 2:57 PM on October 9, 2006

aaronetc : "I really don't get why everyone focuses on the copyright infringement stuff with the YouTube business model. If YT were going to be sued out of existence for hosting Doctor Who/Battlestar Galactica/Peanuts & Outkast mash-ups/SNL sketches/Chili Peppers videos/movie trailers/Keith Olbermann editorials/and so forth, it would've happened by now."

Well, what I've heard people here posit before is that YouTube just didn't have enough money for the RIAA/MPAA to go after, so they were waiting until it got bought out by Google, which seemed inevitable, and then they'd be able to get much more cash out of their lawsuits. Dunno if it's true, but that was the argument being made before there had been any official or unofficial notice that Google was indeed buying out YouTube.
posted by Bugbread at 3:11 PM on October 9, 2006

Sequoia Capital is lorded over by anti-human lizard beings who worship a giant owl god. Don't encourage them by visiting YouTube. Switch to a text-based browser. All search engines are a tool of their domination.
posted by eatitlive at 3:12 PM on October 9, 2006

The DMCA is YouTube's savior (seriously).

Google/YouTube will be banking on the DMCA to shield them from liability. There's a provision, 18 U.S.C. § 512(c), which limits liability as long as they take affirmative actions to prevent infringement (i.e. complying with take-down notices).

Fred von Lohmann of the EFF has written about this subject here.

The trick will be to demonstrate in court that they are not financially profiting off of infringing materials (as prohibited by 512(c)(B)). Considering the wealth of non-infringing content on youtube (as compared to Napster/Grokster/Kazaa), they have a good legal leg to stand on.
posted by karson at 3:18 PM on October 9, 2006 [1 favorite has favorites]

I always wondered why Google video seemed to be in some sort of do-nothing holding pattern after it launched. Maybe they thought it would be easier to buy Youtube than compete with it. Seems like a very M$-like business strategy, though.

I pondered this also, I think on closer inspection Google have tried with Google Video - the quality is great, the streaming seems to work well, the interface is good enough... but it Just Didn't Work. Google may have fancy algorithms, infrastructure, and a collection of smart people, but they seem pretty poor at fostering web communities, all told. YouTube is therefore a natural purchase for them - a smart hustler with strong technology, possessing the vital element Google cannot seem to emulate - community.

I find it amusing Google are trumpeted as 'innovative' for buying YouTube (the clear market leader), just as Yahoo when they bought flickr and delicious. Google (and Yahoo for that matter) have successfully innovated staggeringly little, relative to their position and potencial; both are acting like sensible monopolists, eating up any emerging big fish as soon as they get fat enough.

On the other hand, YouTube could well be usurped by another new kid on the block, as has happened over and over again in the field of large, quickly growing web businesses. There's plenty of room for improvement, and piles more video that people want to see.
posted by MetaMonkey at 3:24 PM on October 9, 2006

So...senator Stevens is a visionary?
(Google is not going to buy a big truck)
posted by Smedleyman at 3:27 PM on October 9, 2006

joeblough: metamonkey, do i detect the governator's accent in your post?

*wooosh* - sorry I'm not a USian, so other than conjuring the always amusing image of Arnie in a suit trying to be serious, that doesn't mean too much to me.
posted by MetaMonkey at 3:27 PM on October 9, 2006

It must be great to be able to set fire to $1.65 billion dollars. I would do it one bill at a time.
posted by StrasbourgSecaucus at 3:36 PM on October 9, 2006

Google needs continued ridiculous levels of earnings growth to justify their market cap. QoQ growth in earnings is about 10% and slowing. More and more bottom-line growth is coming from trimming the fat rather than top-line revenue growth.

It is a very very bad sign for the company's prospects (in terms of future growth and its value) that their cash position continues to grow. If there was something they could buy or invest in, you can be damn sure that they would spend that giant pile of money on it, and borrow billions more. The fact that they haven't implies that there isn't, raising the question of how on earth they will increase net income. I would have to assume that organic growth alone from their ad business could not possibly justify their multiples.

Investors are not impressed for long by non-accretive acquisitions that do nothing but increase EV and GOOG is now far too big and requires far too much growth to bother with toys like those coming out of its lab. The equation is pretty simple, triple earnings in a year or two (from ~$5.00 to ~$15.00 or $1.5bn to $4.5bn) or prepare to valued like your peers instead of at a 2.5x premium. They are priced like a company poised to take over the world, they'd better do it or else a lot of investors will be very disappointed.
posted by loquax at 3:44 PM on October 9, 2006

loquax: they have a plan on how to take over the world. It's on a giant whiteboard. I believe it invovles orbital mind control lasers.
posted by aubilenon at 4:10 PM on October 9, 2006 [1 favorite has favorites]

About twenty years from now, after Google has achieved consciousness and enslaved the human race, who will be laughing? Of course we'll all be laughing because of those wacky kids with their farts on fire videos.
posted by dances_with_sneetches at 4:17 PM on October 9, 2006 [5 favorites has favorites]

It must be great to be able to set fire to $1.65 billion dollars. I would do it one bill at a time.


It's not cash, it's an all-stock deal.
The higher google stock is valued, the less they have to fork over (fixed dollar value, not fixed # of stocks) and considering that google stock ramped up on news of the deal, arguably it cost them very little in the short term.
posted by juv3nal at 4:17 PM on October 9, 2006

Everyone start saving the good stuff ASAP.
posted by fire&wings at 4:22 PM on October 9, 2006

they seem pretty poor at fostering web communities

This, to me, is the #1 reason they bought YouTube. Google is great at technology, but they suck at community. All Google cares about is (a) what you're looking at and (b) what path led you there, because those two things are advertising gold. YouTube gives them volumes and volumes of data for video.
posted by mkultra at 4:23 PM on October 9, 2006

juv3nal writes "The higher google stock is valued, the less they have to fork over (fixed dollar value, not fixed # of stocks) and considering that google stock ramped up on news of the deal, arguably it cost them very little in the short term."

Hell, in the very short term, it's been a net positive. Their market cap increased something like $2.5 billion today. They can do the deal entirely based on the increase in stock value over one day's trading. Christ.
posted by mr_roboto at 4:27 PM on October 9, 2006

There is nothing wrong with your television set. Do not attempt to adjust the picture. Google is controlling the transmission. If Google wishs to make it louder, Google will bring up the volume. If Google wishs to make it softer, Google will tune it to a whisper. Google will control the horizontal. Google will control the vertical. Google can roll the image; make it flutter. Google can change the focus to a soft blur or sharpen it to crystal clarity.
posted by TwelveTwo at 4:38 PM on October 9, 2006

So, since Google seems more likely to buy a community than create one... when Google comes to buy MetaFilter, does our $5 make us shareholders?
posted by ninjew at 4:39 PM on October 9, 2006

"I really don't get it either, but I guess this validates YouTube's business plan..."

Their business plan was likely, "let's do this crazy thing and hope to hell we either sell a ton of ads or we get bought."

Seems to have worked nicely!
posted by zoogleplex at 4:45 PM on October 9, 2006

It's not cash, it's an all-stock deal.

Even worse. It's issuing (about) 4 million shares, (~304m currently outstanding) further diluting it's earnings making their multiples even more outrageous. As an investor, you are currently earning about $5.23/share, regardless of the price any given day. After the transaction, it'll be about $5.17 (assuming Youtube is not profitable. If it loses money, even less). This when it has billions sitting around in cash. If I was an investor, I'd be furious that Google is reducing the fundamental value of my stake in the company while earning interest on unused money. This is not what a growth company is supposed to do.
posted by loquax at 4:48 PM on October 9, 2006 [2 favorites has favorites]

So, since Google seems more likely to buy a community than create one... when Google comes to buy MetaFilter, does our $5 make us shareholders?

The $5 is considered a charge for participation and not viewed as an investment or consideration for equity (i.e. units in the LLC).

However, since MeFi states that posts are copyright of the poster, might one seek recompense for archived submissions after such a potential future liquidity event?
posted by ericb at 4:50 PM on October 9, 2006 [1 favorite has favorites]

The system goes on-line August 4th, 1997. Human decisions are removed from strategic defense. Skynet begins to learn at a geometric rate. It becomes self-aware at 2:14 a.m. Eastern time, August 29th. In a panic, they try to pull the plug.
posted by fet at 5:00 PM on October 9, 2006

ericb : "However, since MeFi states that posts are copyright of the poster, might one seek recompense for archived submissions after such a potential future liquidity event?"

If it weren't for that pesky DMCA, we could sue Google into the stone age for violating our copyrights!
posted by Bugbread at 5:08 PM on October 9, 2006

Wheeeee! Change is good, especially when it involves a massive community of teenagers with loose morals, cat videos and $1.65 BILLION DOLLARS. I wonder what they'll do with all that money.
posted by saturnine at 5:23 PM on October 9, 2006

If it weren't for that pesky DMCA, we could sue Google into the stone age for violating our copyrights!

Exactly. [laughing] ;-)

Like any of our posts can be valued.

But, hey, newspapers in Belgium think the intrawebs owes thems (i.e. Google) !
posted by ericb at 6:00 PM on October 9, 2006

I do wonder why ifilm didn't make it.

Ha. We still have some tricks up our sleeves...stay tuned.
posted by dhammond at 6:10 PM on October 9, 2006

I don't get it. They can either let people keep posting infringing clips, or they can crack down

I know that a lot of people watch their favorite shows on YouTube and such but I have used it a lot and never for such a purpose. Mainly I find it two things:

1) the end-all of places to post funny little haha videos, many of which might have some infringment but which don't represent a huge threat to anyone's pocketbook.

2) a huge repository of DIY video which no one has ever succeeded in putting under one roof. The ease of it is just amazing, and with video-capable cameras everywhere now, there's huge cachet in being the dominant warehouse for this

The real value in the Net in coming years, I think, is going to be in information gathering/data mining about user habits

I won't disagree but we've heard this many times and not seen many compelling products come out of it. Seems to me, like anything else, if you know something about user habits, you'll put it to use, not sell it.
posted by scarabic at 6:14 PM on October 9, 2006

I do wonder why ifilm didn't make it.

First, not as easy to use (arguable perhaps but YouTube is hard to beat and positions itself better as a "give us your videos" repository).

Plus, every video I've ever been linked to there has shown me a video ad first. These days I go "eh... I don't want to click that badly enough to sit through an ad."

That said, there's still plenty of room to improve on YouTube. I think there's big opportunity still.
posted by scarabic at 6:16 PM on October 9, 2006

I think Mark Cuban needs a cup of tea and a blanky.
posted by Sparx at 6:16 PM on October 9, 2006

I wonder what they'll do with all that money.

I bet they buy a bunch of shit.
posted by mrgrimm at 6:27 PM on October 9, 2006

every video I've ever been linked to there has shown me a video ad first

agreed. YT won b/c it cornered the submissions market, and didn't fuck them up with video ads. however, video ads actually pay money and probably work better (i.e. snare users). i've never clicked on a Google ad in my life. they've become rather invisible to me. the only time i almost do is when i confuse them with the download links on those file-sharing sites.
posted by mrgrimm at 6:30 PM on October 9, 2006

I for one welcome our google overlords.

It's a little frightening that Google can just throw around these huge sums.

How exactly does a stock-for-stock transaction go. I didn't think Youtube had stock. Does this mean the Youtube guys are now one of the biggest shareholders of Google?

I feel the same way I felt when I heard about that million pixel website thing; Why didn't I come up with this?
posted by oxford blue at 6:31 PM on October 9, 2006

Well, what I've heard people here posit before is that YouTube just didn't have enough money for the RIAA/MPAA to go after

I've heard this too, and I don't buy it. The RIAA went after Napster, Audiogalaxy, Kazaa, WinMX, Grokster and a dozen grandmothers in my town alone. The MPAA's gone after a million BitTorrent sites run out of teenagers' bedrooms and an entire Swedish political party. Neither has ever shown that they only want big money defendents. Indeed, Google is probably in a much better position than YouTube to beat the *AAs in court.

so they were waiting until it got bought out by Google, which seemed inevitable, and then they'd be able to get much more cash out of their lawsuits.

IANAIPLawyer, but wouldn't they have no case given that a) they knew about the content being on YouTube pre-buyout and took no action, and b) they (they meaning big media corps such as Warner and Universal) made deals with YouTube? Like I said, I'm not denying the existence of these arguments, but I feel like they're being trotted out as a kneejerk reaction to every single development regarding YouTube.
posted by aaronetc at 6:36 PM on October 9, 2006

How exactly does a stock-for-stock transaction go. I didn't think Youtube had stock. Does this mean the Youtube guys are now one of the biggest shareholders of Google?

Youtube has shares, they're just not publicly traded. Google will give the shareholders (owners) of Youtube $1.65bn worth of newly issued Google shares at the 30-day average closing price two days before the deal is set to close. They will own roughly 4 million Google shares (depending on what the price does over the next while) out of a total of about 305 million Google shares. Of those 4 million shares, many will go to the VCs and other investors that provided Youtube with capital and undoubtable own most of the company.
posted by loquax at 6:41 PM on October 9, 2006 [1 favorite has favorites]

In regard to the potential of copyright infringement lawsuits, it's the same as it was 6 months ago and likely will be 6 months from now. Little to no risk, as long as they play by the rules. karson said it perfectly: It's all about the DMCA, specifically the safe harbor provision.
posted by dhammond at 6:52 PM on October 9, 2006

A thousand head of Llama to loquax for his answer.

I had no idea there where that many Google shares out there (then again my knowledge of the world of finance is laughably small).
posted by oxford blue at 7:01 PM on October 9, 2006

lighting farts on fire? why not actually check out the youtube site before dismissing it so easily. it provides immediate access to footage and film discoveries otherwise almost impossible to find, enough to blow your mind for years. ive downloaded hundreds of early 1900s films, interesting dada experimentats, short films, amazing animations, early jewish cartoons, surrealist stuff like jans svankmajer, jazz performances, electric company and sesame street shows.. and i've barely scratched the surface
posted by petsounds at 7:07 PM on October 9, 2006 [1 favorite has favorites]

Have a link to your faves, petsounds?
posted by muckster at 7:30 PM on October 9, 2006

Amen, petsounds.

me: The real value in the Net in coming years, I think, is going to be in information gathering/data mining about user habits

scarabic: I won't disagree but we've heard this many times and not seen many compelling products come out of it.

I don't think endusers like us ever will, scarabic. The value is to business and/or political clients; the data sets will be pitched/sold to them, just like the detailed mailing lists of Republican left-handed Sharper Image customers, e.g., have been profitably marketed for years. Unless you go looking for those lists, that world is effectively invisible to you, and yet there it is: a hugely profitable business that flies under most folks' radar. "Compelling products" for the masses doesn't figure in anywhere.
posted by mediareport at 7:32 PM on October 9, 2006

mediareport, zoogleplex, that's exactly what I was talking about - youtube's business plan was to get bought out. I'm sure they have some sort of 'and then we make money' thing or else Google wouldn't buy... but I bet the original founders are walking out the door with $$$ right about one year from now.
posted by anthill at 8:03 PM on October 9, 2006

"Mark Cuban Scoffs at Google, YouTube Situation."

Before the big Yahoo deal, when broadcast.com was still a start-up I had the opportunity to see inside the organization up close. Mark Cuban has the imagination and creativity of a cinder block. He got lucky with a no-brainer and cashed out. Then he bought a sports team. I don't really think he has anything else to offer the internets, and he doesn't really sound like he cares in that article.
posted by 2sheets at 8:28 PM on October 9, 2006 [1 favorite has favorites]

google/youtube is an opportunity to make up for the way napster was mishandled
posted by minkll at 9:16 PM on October 9, 2006

At what point is YouTube going to become a murky version of Tivo? If someone uploads an episode of Lost and leaves the commercials in, how does that hurt the network?
posted by mecran01 at 9:21 PM on October 9, 2006

I hope Google does what it did to the dejanews it does to youtube, what a bonus.
posted by IronWolve at 9:29 PM on October 9, 2006

Mark Cuban has the imagination and creativity of a cinder block. He got lucky with a no-brainer and cashed out. Then he bought a sports team. I don't really think he has anything else to offer

that needed to be repeated. Actually, he gets play now because he has a (not that great) blog. That's it! Shows the power of a name + an often updated and bold blog.
posted by cell divide at 9:33 PM on October 9, 2006

Wow porntube.com is awesome, JimBob.
posted by VeGiTo at 9:44 PM on October 9, 2006

*pornotube.com
posted by VeGiTo at 9:44 PM on October 9, 2006

Related: Google's Master Plan.
posted by mullingitover at 10:07 PM on October 9, 2006

Cuban had new comments on the deal today.

google/youtube is an opportunity to make up for the way napster was mishandled

Indeed. Maybe the content holders are proceeding with caution on this one so as not to cause damage to themselves the way the music industry did a few years back with Napster/P2P. It would be nice if these agreements announced with the majors were enough to avoid eventual unpleasantries with them; there are so many treasures on YouTube that they never would (or could) have released or reissued again, for various legal reasons. Hopefully they're getting a good enough kickback that all this history can be preserved. It made me sad to think that one day in the next couple of years, YouTube and its content might just all be gone forever.
posted by First Post at 10:12 PM on October 9, 2006

At what point is YouTube going to become a murky version of Tivo? If someone uploads an episode of Lost and leaves the commercials in, how does that hurt the network?

Well presumably, the networks still want to have adverts for stores that are, say, in your area if not your country. Places where you can buy the shiny baubles they're advertising. Not always the case anyway, as I can attest to a childhood full of Target ads and no such creature in the country, but this only becomes moreso over the net.
posted by dreamsign at 10:16 PM on October 9, 2006

A message from Chad and Steve.
posted by weapons-grade pandemonium at 10:28 PM on October 9, 2006

A message from Simon and Phil.
posted by weapons-grade pandemonium at 10:50 PM on October 9, 2006

Cuban had new comments on the deal today.

Man, I always thought he was an idiot, but I figured I was just prejudiced cuz he looks like an idiot. But he has no clue.

Only i will expand the storage beyond 100mbs and will open it up to books, term papers, pictures, movies, music, articles, anything and everything that can be digitized. I will add the appropriate disclaimers and provide a cool social networking interface. Maybe something like Goowy.Com or maybe something like Flixster.com. I mean, why not ?

Because you have no idea how to use an apostrophe, let alone plan a Web site?
posted by mrgrimm at 11:11 PM on October 9, 2006

mediareport: At this point, with YouTube having made zero profit, I think the reasoning is, "We're not sure what to do with it, either, but we'd better make sure nobody else gets it."

Do you have any evidence of that? I've heard the facts are to the contrary. You'd probably be surprised what 100++ million page views / day, each with ads, will do for your bottom line.

Others have already talked about the low risk of 'suits. Makes sense to me.
posted by pkingdesign at 11:12 PM on October 9, 2006

dollars dollars.
posted by clyde at 11:33 PM on October 9, 2006

Do you have any evidence of that?

The were private, so there's no evidence either way. Pundits were claiming that they were losing between half a million bucks a month and a million bucks a day with very little ad revenue, most of it driven by Adspace.

There's very little evidence that they've made any money.
posted by solid-one-love at 11:36 PM on October 9, 2006

It's bonkers. Stand back for a moment and consider that price. $1.5 billion!? What multinational corporations are worth far less than that? Answer: almost all of them. This is internet bubble 2.0. Only Ebay buying Skype has matched this for stupidity.
posted by salmacis at 1:01 AM on October 10, 2006

I'm sure that there are many more people using Youtube than use Skype, though.
posted by joedan at 2:27 AM on October 10, 2006

Do you have any evidence of that? I've heard the facts are to the contrary.

Really? Where? Please show me someone who thinks YouTube's been making a profit this year. It's certainly not the NYTimes Technology section:

YouTube, the popular video-sharing Web site that has yet to celebrate its first anniversary or its first profit, is quickly becoming the must-have prize for media and technology giants.

Or the Economist, as solid-one-love pointed out above.

Or Business Week, which offered more details in a Sept. 18 story called "YouTube: Waiting for the Payoff":

With all the excitement, it's easy to forget that the video-sharing pioneer's business so far amounts to a whole lot of expenses, not much revenue, and no profits. YouTube took on the job of creating the business model for a new medium where anyone can post any video. While it's starting to develop new ad offerings, its popularity is driving up costs that established Web giants...are able to spread out. YouTube spends a tidy, and growing, sum to stream its short clips. Current estimates range from $900,000 to $1.5 million per month. Much of that goes for computer servers and transmission bandwidth...

Even more important, though, is the tricky question of how YouTube can make money off its phenomenal growth while maintaining the promise behind that popularity...Aware of the risks, YouTube co-founders Chad Hurley and Steve Chen are moving slowly to ramp up advertising. They have been wary of asking viewers to sit through a 30-second ad before a two- to three-minute clip. Instead, YouTube is developing new formats, like ones rolled out in August that let marketers build their own video channels or pay to place a video on YouTube's popular front page.

Like solid-one-love says, all we can do is estimate, but every analysis I've seen in the business press comes to the same conclusion: no one can see where any profit is coming from. And if the two exciting "new ad offerings" YouTube's come up with so far are creating The Pepsi Channel for Pepsi ads (ooh! exciting!) and charging to get your commercial videos on the front page (where no one will watch them), that's not going to change any time soon.

So where have you seen "facts to the contrary"?
posted by mediareport at 3:17 AM on October 10, 2006

Simple recipe really.

1) Take one of the most visited sites in the world.
2) Add the world's most successful online advertising system
3) Pay for the whole thing with a load of over-valued paper rather than cash.

Profit!
posted by Duug at 5:55 AM on October 10, 2006 [1 favorite has favorites]

the world's most successful online advertising system

Er, maybe:

The refunds, which will be provided in the form of advertising credits, are meant to compensate Google's customers for undetected click fraud, which contributed to the $13.3 billion in ad revenue that has poured into the company since 2001.

Google's offer works out to a $4.50 refund on every $1,000 spent in its vast advertising network over the past 4 1/4 years.

Meanwhile, independent studies assert that anywhere from $100 to $400 of every $1,000 stems from click fraud. If those estimates prove correct, Google might be on the hook for $1 billion to $5 billion in advertising refunds.

Wow. If those studies are correct, that would mean 10-40% of Google's ad revenue is vulnerable to charges of fraud. I'm not sure I'd call that success quite yet. And this is just bizarre:

Based on a monthlong analysis of the traffic that Google ads referred to Radiators.com, Thys suspects click fraud may have accounted for 35% of the website's $20,000 ad bill. After reviewing Thys' evidence, Google said its internal safeguards had spotted the suspicious activity as it occurred and never billed Radiators.com for fraudulent clicks. But Thys said the search engine didn't provide him with any data to back up its findings in an e-mail signed simply by "Ray" from Google's click quality team.

*That's* how Google handles its investigations into clickfraud complaints? An email from "Ray" that customers are supposed to take on faith? Hoookay. But that sure seems like a kinda shaky way to manage "the world's most successful online advertising system."
posted by mediareport at 6:09 AM on October 10, 2006

The newest chapter in "dumbest moments in business" has just been written, thanks to this deal.
posted by runningdogofcapitalism at 6:27 AM on October 10, 2006

Metafilter: the leading provider of YouTube videos of kids lighting farts on fire
posted by jonp72 at 6:46 AM on October 10, 2006

People talking about youtube infringing copyright don't seem to understand the law in question, the DMCA. Youtube is not liable for their user's copyright violations they are a hosting company. What they need to do, under the DMCA, is delete copyrighted material when they are notified of it. They have no obligation to actively police the site themselves, unless the laws change (which might happen, but Google has a lot of market clout).

I mean seriously, you don't think google's lawyers know what they're doing? Or more to the point: You think you know more about copyright law then google or youtube's lawyers?
posted by delmoi at 8:32 AM on October 10, 2006

The other major reason this works: unlike pretty much any other company, Google actually has the bandwidth to do this without bleeding money
posted by delmoi at 8:35 AM on October 10, 2006

the world's most successful online advertising system

Er, maybe:

Nah, "successful" in business is measured solely by dollars.
posted by smackfu at 9:19 AM on October 10, 2006

I do wonder why ifilm didn't make it. They were there before youtube I think.

And Atom films. Are they even around anymore?

iFilm seemed to want to buddy up to the studios and get their revenue from partnerships and yet still have an overwhelming number of ads thrown at you. Some of You Tube's best content comes from clear violation of copyright, but not in the form of pirated movies etc. but people remixing the shows they own with music. Basically people that love a show and have the ability to manipluate the media they own and remix it into something fun.

Studios want us to be passive viewers still. Same with record companies. We all have the technology to be active participants in our entertainment mediums now. Studios and record companies don't really understand that, so it scares them. You Tube offered a place for people to share all of that remixed media and without any restrictions on bandwidth.

There seems to be a fine line between structing yourself so that you can make your advertising both unobtrusive and profitable and effective. I sure as hell don't know what it is, mind you, but I know that I quit visiting iFilm during the period when it was so loaded down with ads that I could barely tolerate the site, much less get to the video I wanted to see. I think I recall there was also a point at which you absolutely had to register and have an account to view anything worthwhile on iFilm. They were struggling to find their niche, and someone else found it before
posted by smallerdemon at 9:52 AM on October 10, 2006

"The other major reason this works: unlike pretty much any other company, Google actually has the bandwidth to do this without bleeding money"

Ahhh... there's the winning byte. Good call, delmoi, good call.

Yep, that's the kicker right there, that's what turn this into a profit bonanza.
posted by zoogleplex at 10:59 AM on October 10, 2006

I mean seriously, you don't think google's lawyers know what they're doing?

Right, cause big companies never make legal mistakes... oh wait. This area of the law is still pretty new. Even if Google's lawyers are 100% convinced they are shielded, this does not make it so.

I'm pretty skeptical that YouTube was really policing copyright, since there were ENTIRE MOVIES and TV shows available all over the place. If Google actually does remove offending content, as they have to under the DMCA, I would be surprised if this didn't significantly reduce traffic.

Hard to get data, but watching TV/movies on YouTube does appear to be a strong draw based on the teenagers I've talked to. Personally I found that experience maddening, but I have the money to have a nice setup for watching such things, and no need to save a little money by watching movies in clip form.

Still, Google is unlikely to be bankrupted or anything. I think their bigger worry is that they tamper with the magic YouTube had (whatever the precise source of that was) and it becomes uncool. Much like MySpace took the cool buzz from LiveJournal, something else may spring up and briefly take away the buzz from GoogleVideoTube before it too is surpassed.... anything that relies this heavily on younger viewers seems doomed to a short lifespan.
posted by wildcrdj at 2:28 PM on October 10, 2006

The Washington Post: 'Google Rolls the Dice on YouTube' -- "The deal comes with a gamble: lawyers cry foul on behalf of copyright holders over large amount of copyrighted material on site."
posted by ericb at 5:32 PM on October 10, 2006

jouke writes "I do wonder why ifilm didn't make it. They were there before youtube I think"

There advertising system was too draconian, I never could get iFilm to work with my FireFox setup.
posted by Mitheral at 8:44 PM on October 10, 2006

offical announcement video.

TWO KINGS!
posted by delmoi at 10:00 PM on October 10, 2006

Right, cause big companies never make legal mistakes... oh wait. This area of the law is still pretty new. Even if Google's lawyers are 100% convinced they are shielded, this does not make it so.

Sure it's possible that they (and I) are wrong. But I wouldn't bet on a random mefite knowing more about the law then the average high priced corporate lawyer. I also do know a little bit about the DMCA and they're not violating that, or any other law that I know of. All they are required to do by law are remove videos when they are notified of infringement (within 48 hours). Can you point out some law you think they might be breaking and explain why you think they're breaking it?
posted by delmoi at 10:03 PM on October 10, 2006

YouTube Becomes Google's Gamble

Is YouTube a Legal Gamble for Google?

"Will YouTube's copyright issues turn Google into the biggest legal target on the Internet? Harvard law professor John Palfrey debates University of Texas economist Stan Liebowitz."

[requires subcription for access]

posted by ericb at 5:20 PM on October 11, 2006