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YouTube Won't Sell For Less Than $1.5 Billion
Posted by
Zonk
on Fri Sep 22, 2006 07:47 AM
from the quite-a-few-flash-ads dept.
from the quite-a-few-flash-ads dept.
Joel from Sydney writes "According to a report in the New York Post, YouTube has informed potential buyers it won't be sold for anything less than $1.5 billion. The report lists Viacom, Disney, AOL, eBay and News Corp as potential buyers. Given that News Corp purchased MySpace last year for $580 million, is this a realistic figure?" From the article: "YouTube's stated business model is to 'pursue advertising,' but potential advertisers might be skittish considering industry estimates that roughly 90 percent of the content viewed on its site violates copyright laws. And at least one giant, Universal Music, is threatening to sue the company if its artists' songs keep appearing there. As it tries to focus on videos that don't use content owned by media companies, it yesterday launched the YouTube Underground, a contest to 'discover the most talented unsigned bands and musicians on YouTube,' backed by Cingular Wireless, Gibson Guitar and ABC's 'Good Morning America.'"
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Only a 'Moron' Would Buy YouTube 178 comments
ColinPL writes to mention a News.com article about some harsh words from Mark Cuban, on the possible purchase of video-sharing site YouTube. According to Mr. Cuban only a 'moron' would buy the site, because of the obvious possibility of lawsuits over intellectual property. From the article: "Cuban, co-founder of HDNet and owner of the NBA's Dallas Mavericks, also said YouTube would eventually be 'sued into oblivion' because of copyright violations. 'They are just breaking the law,' Cuban told a group of advertisers in New York. 'The only reason it hasn't been sued yet is because there is nobody with big money to sue ... There is a reason they haven't yet gone public, they haven't sold. It's because they are going to be toasted,'"
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They are right. (Score:3, Insightful)
Re:They are right. (Score:5, Insightful)
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Free Speech (Score:4, Insightful)
Remember, the CEO of News Corp is Rupert Murdoch. Everything you see with the Fox logo is his. Its yearly revenue is around $24 billion. "News Corp" is a nice generic name that no one remembers while it's holdings grow out of control. Whenever you see Fox or Myspace or anything listed in the link above, you should be thinking one thing: "It's all News Corp under the direction of one man."
Pretty scary when you think about it.
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badnewshughes [blogspot.com]
Dear Mr Murdoch song by drummer from Queen (Score:2, Interesting)
Roger Taylor (The drummer from Queen) wrote an excellent song about Rupert Murdoch, to be found on his 'Happiness' album.
Check out the Lyrics
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1.5 Billion dollars (Score:2, Funny)
<Dr Evil> We will keep showing asians lip-synching Backstreet Boys unless you pay us... a kajillion trillion dollars!</Dr Evil>
Swelled head (Score:4, Funny)
Let's see... Internet company... flaky business model... outrageous amounts of money... well, my time machine works -- I must be back in 1998!
Re:Swelled head (Score:5, Funny)
Web 2.0 ... (Score:2, Interesting)
1. Create service
2. Get other people to violate copyright with your service
3. Avoid Lawsuits
4. ???
5. Profit (or at least $1.5B)
I'd really love to have seen their pitch to any VC firms
Re:Web 2.0 ... (Score:5, Insightful)
If someone is insane enough to offer that much, well hot damn! Take the cash and run! Otherwise, they get to go about their business, with a bit more buzz-implied value than before.
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Broker: Sure we'll insure your car.
Client: Great, how much?
Broker: $100,000 for this year.
In other words, we don't want your business, but we don't want to tell you to your face. We'll just make our offer
Overpricing with no intent to sell (Score:3, Interesting)
I had that experience myself, asking once for about 5 times the regular price on a service I really didn't want to execute. Guess what ? They said yes.
Moral of the history: if you are going to overprice
Re:Web 2.0 ... (Score:5, Interesting)
Wow, now its a 5 step plan, pretty soon 12
Yeah, we all laughed at the sock puppet and the Superbowl ads, but there is still mega-profit in the
The coolest thing is that I heard on the news the other day where people at the other megacorps are realizing that there is profit in copyright infringement. Madonna's people are OK for uploaded stuff on youtube because they realize its free advertising. Much like the bands that allow taping of their concerts (we are looking at you Bob Weir). Who knows, maybe we can soon buy music in unencumbered digital formats at real market value. Maybe.
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It's a start.
If you consider Yahoo buying Broadcast.com.... (Score:5, Interesting)
The price is huge, but it's not out of line with web-based social properties. Not that it's fair.... but the future revenues if it's managed well could be very big.
Re:If you consider Yahoo buying Broadcast.com.... (Score:5, Insightful)
Now, having that mindshare and brand recognition is certainly worth something, but YouTube itself is a prime example of why that's not as important as they think it is. YouTube grew out of nothing so incredibly fast, as have many other big websites, and there's no guarantee that its marketshare will last. If something better comes along, it will be trivial for the populace to move on to that and all but forget about YouTube.
When/if that happens, what is the owner of YouTube left with? A pile of servers full of a bunch of inactive accounts and a crapload of content that they don't actually own. It seems pretty damn risky to spend 1.5 billion dollars on. With that kind of money and a little determination, I'd imagine you could create quite a few impressive YouTube competitors, and maybe come up with something better.
Re:If you consider Yahoo buying Broadcast.com.... (Score:4, Insightful)
And look at Ford, look at Sony, look at a lot of other 'solid' brands that could seemingly do no wrong.... now battling survival.
It's a dream for many to create a market and dominate it. For now, YouTube has it. Others have tried (Veoh as an example) and failed. The formula isn't quite perfect, but with a little bit of tooling, YT could make a ton of entertainment revenue, as well as dominating perceived VoD. Already Warner has done a deal to legitimatize their videos on YT, and others will follow. It's an enviable position to be in.
Re:If you consider Yahoo buying Broadcast.com.... (Score:4, Insightful)
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Re:If you consider Yahoo buying Broadcast.com.... (Score:4, Insightful)
You can probably write a backend to organize and display breaking news stories, but can you organize, motivate, and edit for a large group of journalists out trying to discover new information?
It's less about what a website's servers do when you request a page, and more about the information/content/resources that those servers are drawing from. My point about YouTube is that there's nothing special about their content, it's not exclusive, they don't own it, and they're entirely reliant on their customers for it. It's a nice business model when you can get your customers to do most of your work for you, but you have to keep in mind that people are generally fickle.
1999 called.... (Score:5, Funny)
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Now that you have got the theme music running in my head I am wondering if I can get old episodes on youtube.
It will go the Napster, Kazaa, eDonkey way (Score:5, Interesting)
Really, enjoy it while you can, because the record companies will sue YouTube into the ground. Soon.
So this company will not be worth anything in a year.
It Might But It Doesn't Have To (Score:5, Insightful)
Or, to put it another way, I think there are better alternatives to suing and the record companies have figured this out. When they sued Napster, Kazaa & eDonkey and then started suing users, I don't think their profits went up. I mean, they might have gotten a few million from the companies and a few thousand from the users that year. But they destroyed something that they could have taken advantage of. Most industries would kill for an infrastructure of people acting as their own marketing tools spreading their product around. Now, it was illegal because the product was being copied illegally. But if the record companies could have taken a look at the business model and adapted it to suit their needs and sued for the ability to call the shots instead of just pure cash, I think they would have come out further ahead in the long run.
You see, if the record companies looked at YouTube and tried to drive them in the ground, they'd only be trying to suppress something that has come about naturally. Why don't they just claim what is theirs and demand all the copyrighted material ad revenue goes straight to them? Why don't they try to work something out with YouTube in an attempt to generate a recurring income? I mean, surely YouTube can keep the quality down on the work or restrict it to certain songs so that people will feel compelled to purchase CDs/DVDs, can't they?
I think YouTube is like a wild stallion and the record industry is afraid of it. They can either shoot it dead (but that will just spawn more) or tame it and generate a steady income from it.
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They got rid of Napster, and while some may now use BitTorrent, a lot more use iTunes. Official commercial video distribution sites are going to get organized, and you can bet the big media companies are going to try to disrupt unofficial, unlicensed dist
Sheeeesh... it would take that much just to (Score:5, Interesting)
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Cost of bandwidth will go down. They may become success
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It would make a great loss leader for a broader based business. Its also a good fit with the news corp policy of running tabloid newspapers.
1.5 huh (Score:2, Insightful)
for $500m I could replicate You Tube in 3 months.
dotbomb 2.0 - how short are peoples memories?
Dean Collins
www.Cognation.net
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Re:1.5 huh (Score:5, Insightful)
Popularity?
Re:1.5 huh (Score:5, Funny)
What YouTube has is... People (Score:2)
Is it worth $1.5 billion for those people? Well the dollar is falling, that's inflation for you. You never know, perhaps potential buyers will make
The time is right to sell it (Score:3, Interesting)
For serious stuff, there's the Internet Archive (Score:5, Informative)
The Internet Archive [archive.org], which is a nonprofit, is also in the free video archiving business. Their main concern has been storage, of which they now have petabytes. Making the system friendly to the casual user has been a lower priority, and the Archive has a tiny staff. But you can get an Archive account and upload your video right now. If you have anything of historical significance, please do so.
The Archive has had some problems with bandwidth, but they just moved to a new data center, and that's improving. Last year, they obtained an archive of Greatful Dead recordings, which can be played out as streaming audio. The Deadheads, with their short-term memory loss problems, would play the same stuff over and over again. This was sucking up most of the outgoing bandwidth and interfering with video playback.
The Archive will probably be around long after YouTube is gone. Among other things, there's a duplicate of the Internet Archive in Egypt [bibalex.org].
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I'd assume that content would always surpass the value of distribution, but maybe that's what's changing.
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Re:Realistic? (Score:5, Funny)
Can I borrow your chicken for a while...?
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I can sell you a chicken for $1.5b...
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Minor correction: you mean News Corporation [newscorp.com]. News International [newsint.co.uk] is the UK newspaper arm of News Corp.
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The real cost is three orders of magnitude lower.
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Collective nouns are treated as plurals, even if their construction suggests singular or uncountable.
The collective noun isn't the
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