Google (GOOG) is in talks to acquire YouTube for $1.6 billion, according to published reports. But such a duo hardly comes at a surprise.
Last week, I wrote about how Google was failing miserably against YouTube in the video wars. Google has also shown that it's a boring place to socialize. Clearly, video sharing and social networking are two growth areas that Google can't really play in by itself. It needs someone else. That's why Google partnered with News Corp's (NWS) MySpace.
Yet if Google bought YouTube, not only would it be the most expensive acquisition in its history, it would be the most defensive and riskiest.
By combining forces Google and YouTube hardly overcome the copyright concerns. GoogTube would have to wipe out 80% of the copyrighted material on the nascent video-sharing site, and then what? If they don't take them down proactively, then GoogTube would be a juicy target for lawsuits.
Still, who wouldn't want to buy the hottest online asset today? At Google's Zeitgeist event this week, every media executive fell over themselves to talk to YouTube founders Chad Hurley and Steven Chen. It was obvious that there were overtures. Michael Moritz, partner at Sequoia Capital, an early investor in YouTube, told an interested buyer attending the Google event that YouTube's not selling. Of course, that's just a line that means absolutely nothing. Of course, everyone is for sale, at a price.
So, what price for YouTube? It's whatever the market will support. Moritz apparently thinks YouTube is the next Google. For that possibility, any price can be justified. Neither Google or YouTube responded to an email, requesting a comment.
Despite YouTube being the fastest-growing online asset in the hottest growth opportunity on the W ...