Wow. YouTube announces 1B streams per day.
Two Three years ago this week, Google bought YouTube for $1.65B, in stock.
At the time, and today, a lot of people say the deal was a bad one and even Google’s own CEO Eric Schmidt concedes the company overpaid by $1B in order to “move quickly”.
But despite online video monetization’s slow growth, I fail to see how the YouTube deal was unwise.
1) Paper Deal
For one, it was a stock deal with Google’s share being practically at an all-time high.
2) Google owns search.
Google is now the the owner and operator of the #1 and #2 search destinations. Jack Welch used to say unless you’re #1 or #2 in a business, get out… what would he have said about being both #1 and #2?
3) Dominant in Two Main Industries
Search is king up to now, video shall be king.
Google can now brag about owning almost 75% of search queries and well over 50% of video streams online.
In our case, last year around this time, YouTube accounted for 36.9% of our total streams. Today, it’s at 49.5%:
Yes, Hulu might very well account for a large share of the total online video revenue right now (and will continue to do so), but YouTube is miles ahead in terms of audience and that is worth something.
4) YouTube now works with most of the Top 100 advertisers.
We used to see horrible ads next to our videos, today we see advertisers like BMW, T-Mobile, AT&T, US Postal Service, TRESemme, MSFT, Verizon, American Airlines, Budweiser, AIG, Absolut Vodka, Captain Morgan, Crunch Gym, etc.
The word that Google overpaid was released this week but it was something that Schmidt alluded to in the deposition from Viacom’s lawyers some time ago, but don’t be surprised if that meme comes up again from Google itself, in order to create enough of a distraction from what is surely to become a massive business for Google.
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