Jonathan Broom| e: jon styletank com| c: 214 763 6923| feed burner

Google's new shoes

Friday, October 13, 2006

I ran across an article this morning about google's recent purchase of the site YouTube. I know that they had made the purchase already, but i didn't give it enough thought as to what it meant, or to how much freaking money these internet companies are bringing in.

If you don't know, google bought YouTube for $1.65 Billion Dollars, or to be more specific, $1.65 Billion Dollars in stock. i don't really follow the market closely, but that much money in google stock has got to be a good thing. i can't imagine it doing anything but going up over the years. either way, that is A LOT of freaking money.

What i found interesting is why they bought YouTube, and what made it valuable enough to google to spend that kind of cash on. Bokardo.com talks about the term "top-of-mind". Basically its your first thought when someone mentions something. for example: communities = myspace, search = google and video = YouTube. this makes YouTube very powerful. more than i first realized. Basically Google is betting a lot of money that YouTube will remain top-of-mind over the next few years so that they can recoup they expense in advertising and search hits, or however they make money on there. with the pace of the internet, you'd think that any website that is top-of-mind today has a 50-50 chance of keeping that piece of mental realestate tomorrow. there's always something new. some new web2.0 thing-a-ma-gig.com to make what we used yesterday obsolete. Google doesn't think so which is why they made this purchase.

What makes that even more interesting is when you think about what they could have bought with that kind of money. imagine the possibilities. out of all the major business moves they could have made with that kind of money, they bought a community video site. Susan Mernit wrote a nice blog on what that means about the future of business on and off line.

0 Comments:

Post a Comment

<< Home