on 10 October 2006Google’s acquisition of YouTube for $1.65bn – admittedly in stock, or ‘pretend money’ as we laypeople like to call it – obviously echoes eBay’s even more ludicrously priced acquisition of Skype. Which in turn seemed like a repeat of AOL/Time Warner. You know, the first time as tragedy, the second as farce. Except that instead of an Internet company swapping its fake value for the real value of a real company, now Google is swapping a share of its fake value for YouTube’s fake value.
At least Skype had some technologies that eBay didn’t, being a telecoms provider rather than an auction house. YouTube doesn’t seem to have anything except the idea of people sharing video files, many of them ripped off. (The only content of UKIP’s recent ‘Webcameron’ cyberskit was a link to the brilliant Blair/Cameron montage from Armando Ianucci’s Time Trumpet; not an official download, but a YouTube ripoff. It’s not clear whether this reflects UKIP policy on intellectual property or just cluelessness. OK, it’s fairly clear.)
It would appear that the only thing being bought and sold in these deals is a slice of the zeitgeist. Valuable thing, zeitgeist. For 15 minutes.
If you were a Google shareholder, wouldn’t you be asking, as you waved goodbye to your $1.65bn, ‘Er, couldn’t we just have set up our own site, called, like, GoogleTube? How much less successful than YouTube could that have been, what with Google being quite famous? Don’t we already have a lot of servers and stuff that could stream video? What exactly are we buying here again?’
Then again, if you were a Google shareholder you probably wouldn’t be asking too many questions about how Internet companies are valued. That Soylent Green tastes pretty good.
Of course, the one good reason why Google would buy YouTube instead of competing with it is to avoid having to compete. That’s today’s brave new cyberworld. Instead of lots of little companies trying to improve on each other’s offerings, you have one big company that quickly dominates a market, acquires the capitalisation of a small country in a hyped IPO, and can then buy up anyone who pokes their head above the parapet.
I can’t seem to find this scenario in my Ladybird Book of Healthy Market Economies, but maybe it’ll be in the next edition.
adambanksdotcom @Herring1967 "watching on screen"?! That's not a subeditor, it's a butcher with English as a third language