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YouTube’s Magic Number - $1.5 Billion
techcrunch.com — “A senior exec at a well known media company that has been in acquisition talks with YouTube ”, says that YouTube is absolutely willing to sell, but that the number must be “at least $1.5 billion.” Article contains a detailed overview of YouTube traffic and copyright issues they face.
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- brendanc, on 10/12/2007, -1/+17I think they're being a bit too greedy, but hey, at least they're not trying to get $2bil like the Facebook guy...
- Arch, on 10/12/2007, -9/+3YouTube is more than 3 times better than MySpace.
- gregharmon, on 10/12/2007, -1/+13MySpace was a STEAL for $580 million. News Corp has already made that back with a 1 year contract involving Google.
I would take MySpace over Youtube any day of the week. No copyright issues and a larger userbase ( afaik ). - Dayz, on 10/12/2007, -0/+3How come Google Video doesnt have this toruble?
- bpapa, on 10/12/2007, -1/+5YouTube has the eyes of all on the internet. In my opinion 1.5 billion sounds right, if it's not a steal.
- Vindstille, on 10/12/2007, -0/+1"How come Google Video doesn't have this trouble?"
Maybe the copyrights owners think Google is so big and strong that they don't dare to sue them. - deut, on 10/12/2007, -0/+2I'm sorry but you guys are absolutely nuts!
$1.5 bill ??? - I think you lot have been watching too much Goldmember.
As soon as anyone starts to do anything really commercial with this site, LIKE MAKE SOME REAL MONEY FROM IT, the *AA's will come down on it like a ton of bricks. - skyshock21, on 10/12/2007, -0/+1And I'll still sell my coffee mug on my desk, but the price has to be at least 10 Billion dollars.
- ivachen, on 10/12/2007, -0/+1i don't really see why youtube can't make money over time. what they need is a huge telco that runs many backbones behind them to cut the bandwidth costs down, and then they are basically a network channel that broadcast whatever people like to see over the internet. There's already a lot of ads on youtube im sure they make something, and the bandwidth cost will only go down overtime. As for the legality, that's a risk that any business will need to take, because it's user content they have a pretty strong case, at least for now.
- mraustin1337, on 10/12/2007, -0/+1Really I'm not sure what the *AAs could do to YouTube. They could certainly sue but I would think the user would be responsible as it says that you are not allowed to post copywrited material.
Additionally I think any of those Associations would write a C&D letter before sueing. Which would have to be pages and pages long to encompass the copywrited material on YouTube.
- rotten777, on 10/12/2007, -2/+8It's a bluff to draw a 75% offer. I would like to say it'll be a cold day in hell but some idiot (or group of idiots) will probably end up buying it.
- neoknight, on 10/12/2007, -0/+3Imagine the traffic dropping after they buy it, that would suck huh.
- digitalsin, on 10/12/2007, -31/+9Why are there so many of these kinds of articles on digg? Every day it's "Whats YouTube worth??" "Is YouTube making money??" etc etc
Who really cares?- JamesWilson, on 10/12/2007, -10/+20The people who dugg the story.
Now what I don't really care about is comments like yours asking "Who really cares?" So, thanks to the power of digg, I can mod your comment down.
Welcome to digg, where everyone has a voice. - Ystig, on 10/12/2007, -4/+5Seeing as, if not used in (or constituted as) the story itself, a youtube link of some sort tends to make its way into just about every thread on digg, presumably diggers do.
- digitalsin, on 10/12/2007, -19/+3@JamesWilson: Yes, and thanks to Digg, I can do the same to you.
Wow, isn't that just neato. - merreborn, on 10/12/2007, -0/+4Not only do we get these articles all the time, look at the tech section right now:
There's another one 7 links down! - cardwell, on 10/12/2007, -3/+4Can't we all just get along?
- zionad, on 10/12/2007, -5/+5@Digital Sin:
And I have the power to cancel your vote! XD - VinceNoir, on 10/12/2007, -2/+1@JamesWilson
Yes. Welcome to the face of quick decisions with no thought other than "I don't like what you said so you have no right to say it in my presence". Welcome to idiot mob rule. Democratizing news my ass. Digg is simply making it easier for the dumb to dumb things down even further while patting themselves on the back. That's why I still use Slashdot more. Even with the Slahdot crowd being innundated with it's own brand of idiot, at least there's a more intelligent idiot and more restrictions from them imposing their idiocy (in terms of moderation) on everyone else. Yup. Digg sucks. - EComni, on 10/12/2007, -2/+0@VinceNoir
"Even with the Slahdot crowd being innundated with it's own brand of idiot, at least there's a more intelligent idiot and more restrictions from them imposing their idiocy (in terms of moderation) on everyone else. "
Yep, time for me to get dugg down to hell with this one...
Don't get me wrong, I like both Slashdot and Digg. And (like what's happening to you and probably me right now), I can't stand Diggers that'll bury something that goes against their narrow-minded view of the world without even having the courtesy to retort that comment...
..but look at any topic on /. that's a potential haven for fanboys. Macs, iPods, Nintendo, Linux, etc. What happens more often than not is that you've got a number +5 Insightful or Interesting posts that aren't anything but BS anecdotal evidence e.g. "No one I know runs Windows" and aggrandizing "such and such is groundbreaking" crap, all dressed up in good grammar and a big vocabulary. The actual REASONABLE comments and retorts aren't modded up (or, even better, modded down as Troll). These comments go unread in the default threshold, and the only thing a casual onlooker will see is "Linux is gonna spread like wildfire" nonsense that gets modded to the max. There may be a gem here and there that actually shows some grasp of logic and reason that gets modded up, but too often it'll be some fantasyland crap with the usual worthless "I know someone" anecdote segway into a nearly insane conclusion about how Linux is going to dominate the market or how the Gamecube was the best console ever or how the iTunes is awesome, but any other DRM service is evil. And it all results in elitist hive-mind.
I'd still put /. firmly ahead of digg in terms of overall comment quality, but I don't see dumb leading the way on digg as much as I see the perspective-devoid elitists leading the way on /. when it comes to certain topics.
- JamesWilson, on 10/12/2007, -10/+20The people who dugg the story.
- Philodox, on 10/12/2007, -0/+19I wish I had enough money so that I could afford 1.5 billion dollars for the privilige of losing millions every month.
- kingp, on 10/12/2007, -2/+1I now announce the sale of my online music service. I can not possibly take any offers lower than 1.5 billion. Oh and we HAVE a revenue model. You know, if the YouTube guys can find someone that will buy it for that price, however I can't help but feel that this is the beginning of another .bomb era. In many ways I hope not.
- rockorager, on 10/12/2007, -8/+1I hope it isn't Murdoch of Fox...otherwise YouTube will turn into myspace
- Yashu, on 10/12/2007, -3/+1before fox bought it, it was still myspace... it hasn't changed much at all... that is part of the problem... it STILL sucks.
Fox buying youtube would not destroy it any more then any other big media company... infact, it would probably be better off under fox beleive it or not. Would you rather it go to someone that will immediately censor it's content? Myspace is a seething cesspool, yet it is owned by the ultra conservitive fox.
Fox is a strange company... - swirvi, on 10/12/2007, -0/+3Fox isn't ultra conservative. They run a(n ultra) conservative news channel because there's truckloads money in it. They bought that cesspool of a website for the exact same reason. Rupert Murdoch isn't an idelogue, he just loves money. That isn't strange.
- Yashu, on 10/12/2007, -3/+1before fox bought it, it was still myspace... it hasn't changed much at all... that is part of the problem... it STILL sucks.
- cmearns, on 10/12/2007, -3/+2Incredible. Its just astounding that something so volatile can realistically be valued so highly.
Also amazing that... "I could have built that!". Darnit!!! - sumfight, on 10/12/2007, -9/+0Youtube is worth a lot more then that IMO
- ICSU, on 10/12/2007, -5/+2High school is gonna be tough for you.
- gabeN, on 10/12/2007, -1/+1I think it would be cool if someone in the PVR game bought it... TiVo, or M$, then they could have a YouTube Channel for browsing from the couch... Although ads would suck.
- lubos, on 10/12/2007, -0/+6Traffic of YouTube is impressing. 100 million views a day is almost beating Google in search queries. Now, the problem is this MySpace community which is generating huge share of this amount and which is IMHO really not worth of $1.5 billion. YouTube reminds me sort of Geocities which was sold for over 3 billions to Yahoo but it never made a penny.
- OMGWTFROFLMAO, on 10/12/2007, -0/+3Step 1) Acquire Youtube for vast amount of money
Step 2) Implement an "Ad-before-play" policy requiring each video to show a commercial before viewing the actual video
Step 3) Copyright EVERYTHING
Step 4) Start dropping cease and deists/lawsuits to all sites egregiously linking to youtube vids- cmearns, on 10/12/2007, -0/+1Sure you can copywrite everything... but does that mean that Joe User doesn't have rights to his own videos?
And that still doesn't get past the problem that those videos contain copywrited materials already. You can't legally copywrite something if you don't have rights to its content already. - cmearns, on 10/12/2007, -1/+2On the other hand... thats exactly what Rupert Murdoch would do.
By the people... For the.... Billionaires.
- cmearns, on 10/12/2007, -0/+1Sure you can copywrite everything... but does that mean that Joe User doesn't have rights to his own videos?
- gregharmon, on 10/12/2007, -0/+5The copyright issues are major. And I don't mean like "pretty big problem but it'll probably be worked out soon..." No, I mean "HUGE problem that has no end in sight and as soon as Youtube puts ads within those videos, all hell is going to break loose in the courts."
Therefore, there is no way in hell I can see anyone coughing up 1.5 bil.- ICSU, on 10/12/2007, -0/+2So what about the other two video sites the article mentions?
- Zopperoni, on 10/12/2007, -4/+1Discussion going on here as well:
http://digg.com/tech_news/What_YouTube_is_really_worth - grayapple, on 10/12/2007, -1/+2I was ***** waiting for this!
This was the only real way the owners would make any real money. - z.unit, on 10/12/2007, -0/+6Random: I was on youtube last night and was highly amused that someone uploaded the entire movie Scarface in 17 parts to it, who needs unbox or itunes?
- MrBabyMan, on 10/12/2007, -0/+3$1.5 Buh-hillion?! Good luck, YouTube... Your own tremendous success may be your demise.
- vhold, on 10/12/2007, -0/+4Enjoy YouTube while it lasts, we may never see anything quite like it ever again.
- 5blocksfree, on 10/12/2007, -2/+1This might suck hard for the internet community at large. Currently, Youtube is an independent entity - once it is owned by a large media company, ANYTHING can change - it's use policy, its privacy policy, what it does with information regarding videos that you've watched or posted, the introduction of political bias, etc.
As an example, over the past few days, there has been a spate of highly-rated videos that speak disfavorably of Bush, and others that question the circumstances surrounding the 9/11 attacks. I am not confident that users would have the same lattitude under the ownership of a large media company - and that's too bad, because it's precisely this kind of thing that make Youtube such a valuable resource. If anything, it's a way to get AROUND traditional media.- lakawak, on 10/12/2007, -0/+1Yeah, because no large corporation or news media is far left leaning.
Right.
- lakawak, on 10/12/2007, -0/+1Yeah, because no large corporation or news media is far left leaning.
- jameskmurphy, on 10/12/2007, -2/+1It will be a sad day if the sell or close this site down
http://you-could-be-a-redneck-if.blogspot.com
http://youtuberaider.blogspot.com
http://freshvideo.blogspot.com - webgod61, on 10/12/2007, -0/+31.5b....yup that sounds about right for the minimum amount they will eventually owe after every company in the world is done suing them for copyright infringement. NO company would buy YouTube in its current state, that is with all its copyright material hanging around. They are a financial disaster waiting to explode, the only reason no one is suing them yet is because they have no money to pay out, as soon as the get money in the bank...BOOM I predict lawsuits left and right.
But YouTube is awesome and I hope they can stick around for at least another year. - phlogiston99, on 10/12/2007, -1/+11) collect terabytes of user submited video for free. Also redistribute said video for free.
2) ...
3) profits. $1.5 B that is.
Brilliant I say! Brilliant! - herrshuster, on 10/12/2007, -0/+2http://digg.com/tech_news/YouTube_wants_to_stay_independent
lol..56 days ago, and the first comment is "so how many weeks until the sellout?" let's see..56/7=8
8 weeks, not bad - zetsurin, on 10/12/2007, -0/+2haha, does this guy think we are still in the web bubble or something?
- diggmaddy, on 10/12/2007, -0/+1I think this amount is fair enough. It's not about the site itself. It's about the insanely HUGE amount of recorded talent that comes with it. And as we all know, all videos uploaded to youtube are youtube's property. So, when they sell the site, they also sell the rights for all those videos.
- lakawak, on 10/12/2007, -1/+0Except we've already established that it is NOT YouTube's property. Yes, they can use it as they see fit. But they don't own the rights to it. If a user takes it off the site, YouTube no longer can use it.
- alpha736, on 10/12/2007, -0/+2I think YouTube is definitely being a bit greedy. Compare this 1.5 Billion to the 5.4 Billion ATi is being bought for. ATi is a much larger "Product" than YouTube. I don't think YouTube is worth more than a quarter of ATi (ATi = 5.4B | 1/4 of ATi = 1.35B), Youtube is worth something way less than that...
- acslat3r, on 10/12/2007, -0/+0To be profitable I would assume they would go the route of an ad clip starting then it switches to the actual clip being stored. By having them seperate maybe they aren't attaching the ads to the copyrighted content so they can potentially at least have a leg to stand on if they get a cease and desist letter.
They could keep track of whoever viewed an ad based on the IP address and only prompt/force them to watch an ad for every 20 minutes of viewed content or whatever. The problem with this is that hosting is not cheap so you might have to view more ads to offset all the expenses of the bandwidth/storage. I don't see many people doing startups for hosting web video content for free without screening it first if the sale of this business is not profitable.
That being said I could see this selling for 80 million if that. If they got rid of external linking and got all viewers on youtube then it could easily triple that. - The_Dude, on 10/12/2007, -0/+11.5 billion. I don't think so. What's so valuable about ANY video on youtube?
- chr0n03939, on 10/12/2007, -0/+0Despite what any of us think YouTube is worth. Network executive types determine how much they think it's worth. They'll crunch numbers, work out ideas and see how long it will take to make back plus increase revenue. If 1.5 billion isn't the right number for that company then they won't buy it.
Also there may be a reason youtube set its bar so high. They may want to put on a facade they are selling, to postpone lawsuit attacks. They say "Oh, yeah, we want to sell.... but for no less than 1.5 billion."
That ensures that the copywright issues may back off, and if anyone does buy it for that much. Well then they just won. It also says "Hey look at the new ownership if they have 1.5 billion to give to me, then sue them. They have plenty of money" - shotgunefx, on 10/12/2007, -0/+1Youtube isn't worth much at all. It's not an innovative site, it does not have any loyalty from it's users, it's simply a first mover in freebie video hosting. Once they clamp down, users will just move on to something looser.
There is nothing behind it, just people and people change ;) - lakawak, on 10/12/2007, -0/+2Yahoo thought that Broadcast.com was worth about $5 billion dollars at one point too. Shortly after Mark Cuban cashed out his $1.8 billion share of that, it was worth about $50 million.
The bubble WILL burst again. Maybe even more spectacularly. These sites are once again relying on website advertising and more and more people are learning about ad blockers. Not to mention the click fraud. It will not be long before advertisers start to push Google and the others into offering them MUCH better deals because of this and then Google will have to offer much less money to the websites.- shotgunefx, on 10/12/2007, -0/+1Broadcast.com was the first thing that comes to my mind too. Though, Y! had no idea of what do actually do with it either.
- The_Dude, on 10/12/2007, -0/+1Agreed on the Mark Cuban thing. It's rich too that on his blog, he predicts the fall of Youtube.
Anyway, I don't think we're in any kind of bubble like the the late 90's to 2001 bubble. That was a big ass bubble. Huge. How many internet companies now can you name that have enormous (over) valuations? Not that many really.
- slackor, on 10/12/2007, -0/+1I don't see why companies are buying existing sites (Sony paid 65 million for Grouper.com! wtf) instead of just building their own. You could probably start another Youtube for 1/3rd of the asking price. 50 million could build a site just like Youtube with exactly the same stolen content, add a few new features like hi-res videos and cash prizes and use the remaining 450 million to launch an ad campaign to promote it. You'd have the same traffic levels within a few months. The fact that Youtube took only a year to get into the top 10 sites proves how worthless it really is.
- The_Dude, on 10/12/2007, -0/+1Well CEO's and financial types probably like buying assets more than dealing with a bunch of IT CIO's and outsourced teams, etc, that are necessary to build something similar. Plus, even if you build in house, there's no guarantee that it will bring the userbase of something that is already built. Now estimating the value of the userbase, that's the art/risk part with these deals for sure.
- anagoge, on 10/12/2007, -0/+1If they are willing to negotiate, I will do a deal for £10 and that's my final offer!
- wmhunter, on 10/12/2007, -0/+0I can't see any real way of making money out of YouTube.
Other then having a strong user base, they have massive bandwidth charges and I think they were hurting a bit before they decided to sell due to the preasure.- anagoge, on 10/12/2007, -0/+1Currently, the director's account is free (as far as I'm aware?). If the director's account was a premium, that would be a great source of revenue right there.
- unstatusthequo, on 10/12/2007, -0/+1Anyone with experience on book values of companies and valuations can tell you that based on accounting value, that is much, much too high. They are adding a 5000% premium for the name and growth potential (which in terms of revenue appears sketchy at best)... How about $5 million?
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