Google May Buy YouTube for 1.6 Billion

The net exploded today when TechCrunch's Michael Arrington reported the possibility that mega search engine Google "may be in the final stages" of buying video giant YouTube for a rumored $1.6 billion.

"A quick phone call to a VC confirmed that the rumor is circulating (he also confirmed the price)," Arrington wrote, "but that is far from confirmation that this deal is happening. I'm digging for more but the source on this one is very good."

Arrington gave the internet rumor only a 40% chance of being "at least partially true."

Last week, Broadcast.com founder Mark Cuban called anyone who would purchase the video-sharing YouTube site a "moron" due to the risks of copyright infringement lawsuits. Ironic, seeing as though Cuban gained billions when his site was sold to Yahoo.

Still, Cuban predicted that YouTube would eventually be "sued into oblivion" some day. However, Warner Music Group turned away piracy fears by planning to upload some of its music videos to YouTube and garner an unknown percentage of the profits from ads displayed next to them.

Garrett Rogers of ZDNet thinks the GoogTube deal may be a good one: "If this does happen," Rogers posted this morning, "the investment would more than pay for itself on advertising dollars alone - contextual video ads powered by Google will be a common occurrence in the near future."

Rogers contended that "even if [Google doesn't] monetize the service right away, [YouTube's] users alone are worth the price."
But "What is YouTube Really Worth?"Forbes asked today, wondering if "this is Dot-Com Bubble, Part II - with MySpace, Facebook, YouTube and the other new Internet phenoms destined for oblivion when the fad fades."

Yet the Forbes piece does admit that if the recently inked MySpace and Google hook-up worth $900 million over three years is any example, deals like this indeed will be much different from the dot-com bubble of the 1990s.

As one of millions, I will watch the YouTube / Google deal closely. Especially due to a comment made by AssociatedContent.com CEO and founder Luke Beatty printed in my interview with him yesterday, where Beatty referenced a "bigger and badder video program and new content distribution avenues" for Associated Content in the hopper.

Normally, references to Associated Content strengthening its video content wouldn't mean much as stand-alone comments, except for the fact that Tim Armstrong, head of Google's North American advertising sales and operations teams, sits on Associated Content's board of directors. Tim was also Beatty's Connecticut College roommate.

Hmm...do I smell an AssociatedGoogTube agreement in the works? Looking at Associated Content's phenomenal growth in recent months and noticeably new advertisers, it's not a far-fetched idea. Or maybe I'm connecting Google and Associated Content and YouTube dots that won't ever touch.

Armstrong has yet to comment on the YouTube and Google talks, and, according to the Wall Street Journal, a Google spokesman said, "We don't comment on rumors and speculation."

Whatever happens, time and the blogosphere will tell.

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