Google’s Purchase of YouTube Was Defensive

Yesterday’s morning rant about Google/Yahoo seems to have touched on at least one point that is shared by smarter people than me. Google’s gobbling of YouTube was more defensive than offensive. Says Benjamin Schacterof UBS Investment Research in this Dow Jones article by Carmen Fleetwood (thanks Jim for sending).

It’s classic blocking. Without inventory, advertisers can not spend money, without advertisers, publishers will not become partners, without partners, content providers will not provide content.

Also- it seems that YouTube is alleging it makes 100,000 million in annual sales (which I highly doubt). So that would put the acquisition at 16.5 times earning instead of the 1000 multiple I claimed. Again- you have to believe that YouTube earns 100 million to accept that multiple.

Parenthetically I noticed that there are a lot of positive comments that praise Chad and Steve in their “I Just Can’t Wait to Be King” video. I told my daughter about the acquisition and my video rant, and she responded (mind you she’s 8):

Why don’t you be nice to them so they give you some of their money?

I laughed from when I started putting my socks on until I was completely dressed. When I got home last night she told me she heard the news, and thought they said Google bought CubeBreak.

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