If you can’t beat them, buy them
Google announced today that its buyout of Youtube is complete. The deal was priced at $1.65 billion, but with market closing the previous day at $481, YouTube was able to receive $1.77 billion. Google has set aside $200 million, which is said to be a copyright defence fund.
Investors see this transaction as a good investment for Google and themselves. Google closed 1.72% higher today, with a one year estimate of $533 per share; up about $40 from current prices.
David Hallerman, eMarketer senior analyst, estimates that U.S. online video advertising spending will total $410 million this year, and about $2.9 billion in 2010. These figures sound good, considering you own a user driven video site like YouTube, but what about the future?
Google is expecting to give YouTube a new marketing strategy, increasing the amount of advertisements on the site.
We shouldn’t be expecting to see any pre-video advertisements according to the YouTube marketing department; although, I believe over the next few months you will start to see considerable changes to the layout of YouTube, and the way advertisements are displayed.
Google completed its $1.65 billion ($A2.2 billion) acquisition of hot video-sharing website YouTube, setting aside $US200 million of the price as an apparent copyright lawsuit defence fund.
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