A Perfect Match

Okay, by know you’ve probably heard about Google’s purchase of YouTube for $1.65 billion. Yes, that’s a lot of money, especially for a company that apparently has yet to make a profit, and really especially while the excesses and failures of the DotCom Bust are still fresh in the minds of so many investors. Sure, YouTube delivers more video on the Internet than any other site, but what about all the noise about copyrighted content that gets posted there? Isn’t Google buying a huge legal liability?

It turns out that the Google folks may have already solved this problem. The company announced arrangements with Sony BMG and Warner Music Group to put their content on the site. Some reports have talked about possible revenue sharing arrangements. So rather than fight with the content providers, it appears that Google is finding ways to join with them in ways that are financially beneficial to both sides. And for the others who still want their copyrighted content removed from YouTube, who is better equipped to find these needles in the haystack than Google?

I expect that this deal insures YouTube’s future for quite some time, and we’ll see video over the Web take on even broader roles. No doubt this will include some forms of video advertising, since advertising is one engine that drives Google, but I expect we’ll see all sorts of new applications as well. This is one of those synergistic deals where the merged parts are even stronger.