The article Google Is in Talks to Buy YouTube As Rivals Also Eye Hot Web Property by Kevin J. Delaney was published October 6, 2006 in the Wall Street Journal. The article talks about another possible acquisition through web-search giant Google to increase its presence in Internet video advertising. According to the Wall Street Journal Google is in talks with YouTube to purchase the California based online-video company for roughly $1.6 billion. After Google’s competitor Yahoo announced interest in the social-networking site Facebook earlier last week, to gain market share in the highly lucrative online ad market, this clever move could put Google far ahead of its competition in terms of market reach. Yahoo itself showed interest in YouTube but its initial offer was turned down. YouTube is currently the market leader in terms of daily visits which averages around a 100 million video views per day or 46% of the market share. The deal between Google and YouTube would combine a massive online ad system with the top online-video site and would allow for a big-boost in Google’s online-video efforts. Google could integrate YouTube’s immense inventory of tagged video contents with its key-word approach and advertising customer base to become even more attractive to online advertisers. Advertising could not only be presented in paid search, sponsored links or banner ads but also through minimovies and webisodes. Minimovies are very short, cinema-like ads filmed specially for Internet showing, while webisodes could be animated cartoons, TV-like ads or music videos using Flash or other technologies. Besides the various possibilities of using different online marketing techniques, Google would also gain a highly engaged audience. Since TouTube’s movie clips are tagged according to their content or genre, viewers could receive selected advertising according to their preference or interest. Google will be way ahead of the online advertising game if they could really pull off the deal with YouTube compared to its biggest competitor Yahoo and increase the interest of online advertisers in its services. After the recent purchase of the exclusive rights to provide ads and search engine results on MySpace, Google is continuing its shopping tour through the World Wide Web. Websites such as YouTube and MySpace, are seen as the “front doors to the Internet where companies can grab users’ attention and market to them”. Hopefully these shopping trips will turn out to be profitable for Google and the online marketing industry and not turn out in another internet bust, other internet companies experienced in the past.
1 Comments:
In order for Google to remain in competition with Yahoo, acquiring YouTube was the best strategic decision the company could have made. After hearing all of the talks about Yahoo acquiring Facebook, Google needed to do something different. YouTube was definitely the greatest choice.
YouTube, which I personally do not use, was started by young savvy teenagers from their own home. It soon grew to gain 46% of the market share and began competing with large companies such as MSN, Google and Yahoo. By acquiring this company for 1.6 billion, Google will be able to attract more consumers to their site. They will be able to use the videos to promote many new advertisements. There isn’t a specific target market that YouTube was attracting so Google does not necessarily need to focus on certain kind of individuals.
Now I think Google will have the competitive advantage over the competitors until another company decides to take over a new site, which should occur sooner or later.
Post a Comment
<< Home