Google-Youtube: The Aftermath

Following the mega deal of the week, TimeWarner CEO Dick Parsons had this to say:

“The YouTube deal demonstrates the power of user-generated content today. “The question is,” Parsons said, “where is it going and how do you make a business out of it? Is it going to take over edited or professional content? No. I don’t think its going to overrun TV or movies.”

Parsons went on to note that for a “traditional” media company, like Time Warner, “This would be a tough acquisition to justify at this price, But for Google, it’s in their sweet spot. They are our partner on AOL Video, we know their vision. They’re trying to acquire anything that generates traffic—they monetize Internet traffic. None of the other media companies could have been in that ballpark.””

From the advertising industry, Organic Inc’s CEO Mark Kingdon:

“…thought the online video-sharing startup would have made more sense as a Yahoo Inc. property.

Google is strong as a “link and list business,” Kingdon said Wednesday during a conference call organized by UBS. Yahoo, on the other hand, is expert at organizing content into channels — and that is exactly what the fledgling YouTube site needs right now…

…Web companies haven’t figured out how to make video advertising appealing to them, he said. Yahoo’s structured display advertising allows companies to create big brand splashes on its content pages. In the same way, Google, YouTube and others hoping to make money in the video space need to come up with a new way for advertisers to reach video viewers, Kingdon said.

And 30-second commercials tacked on to a video aren’t going to cut it. “People today are walking TiVos,” Kingdon said, referring to the digital video recorders that makes it easy for viewers to skip advertising spots. “If they see something that looks like an ad, they mentally look beyond it.”

And a post-takeover Eric Schmidt had to play shrink to hyperventilating media bigwigs from NewsCorp, Viacom, CBS among others, fearful of a “Youtube-on-steroids” competing with their expensive media content (article here):

“Eric Schmidt is barnstorming New York this week to assure traditional media companies that the internet search company’s $1.65bn (£889m) acquisition of YouTube, the video start-up, will not turn it into a content competitor.

The Google chief stressed… that the YouTube purchase was intended to increase Google’s ability to distribute advertising and video on the internet. “We are not in the content business and partnerships really show the application of our advertising network to the content and media abilities of our partners. We want those partners to put their media content into this emergent [system].”

The driving force behind the decision to buy YouTube was Google’s belief that video is “one of the most important new media types on the internet”, he said.”

So there you have it, a round-up of the CEO view of the Google Youtube deal.

Related Article here.



One thought on “Google-Youtube: The Aftermath

  1. I think, to state the bleeding obvious, that google is now in the box seat to control online video. whether it will manage it or not, well, we will see. Great article here on the topic –
    love the “famously litigous” microsoft line

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