Google has bought YouTube for US$1.65 billion. This despite the threats of copyright infringement lawsuits from major entertainment industry players whose copyrighted material are posted in YouTube.
The popular video-sharing site was a natural acquisition for Google, which needed a vehicle to ride the online video wave.
Naysayers scoffed at YouTube’s long-term prospects, predicting that it would go the way of the original Napster, which was sued into submission by music companies and artists. But they did not consider the undeniable business savvy of YouTube’s co-founders, Chad Hurley and Steve Chen. To pre-empt any potential stumbling blocks to the impending purchase, YouTube closed deals with Warner Music Group Inc., Universal Music Group, CBS Corporation and Sony BMG Music Entertainment to license content. In the stroke of a pen, the once edgy and still unprofitable startup has become mainstream.
Where does this leave all the netizens who made YouTube what it is today ? For one thing, their access to the free content which made YouTube so popular is now far from assured.
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Amadeo
Shades of the tech bust in 2000?
When year-old companies got traded and bought at astronomical prices – all because of expectations of future profits.
What happened to P/E ratios?
Todate, the NASDAQ index still hovers at half the points registered during the height of the tech boom.
The Warrior Lawyer
Sorry for late reply Amadeo. Its not as bad as the tech boom and bust of five years ago. These companies, though new, have a solid presence on the net and will be riding the wave of the next big thing.
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