October 10 2006

The eyeballs have it: Google and YouTube

Well, it won't be news that Google have bought YouTube. While finding difficult to get excited (other than by the thought of rolling around in 1, 650,000,000 dollar bills... ) there's some small initial interest for web marketers.

There's a certain fascination in watching very large animals undertake a mating dance and finally get together. It's a relief that the task is accomplished without any broken bones, and in all of the theatre it's sometimes difficult to work out where the spark of attraction lies.

There's one point of view that holds that big companies are simply mesmerised by other big companies, and feel a primaeval need to 'own' them. In the case of Google, seeing such a traffic magnet that isn't in thrall to its adWords must be like seeing the last slice of pie on a place with your hungry cousins all sidling up - salivating and with forks in their hands. Get in quick and scoff the slice.

I can't help but feel that another of the cousins would have enjoyed the slice a lot more. Yahoo! for instance has a more developed community model that could have embraced YouTube. Maybe that was Google's concern. Ebay could even have looked at 'monetizing' the millions of up/downloads via PayPal.

Google chief executive Eric Schmidt said in a statement that "The YouTube team has built an exciting and powerful media platform that complements Google's mission to organize the world's information and make it universally accessible and useful". That's odd - I thought the aim was to reach the world's information and sell ads on it!

Google's route to commercialisation is to combine adWord revenues with pay-to-download. Google has announced that music videos from Warner will be available for download at $1.99 each.

Suddenly, Google can move to being a retailer - possibly competing with iTunes and other video services.

Initially the biggest effort will be to digest the acquisition and work out the opportunities. Marketers, however, will have a bigger canvass for reaching customers and meanwhile the whole video and personal TV channel arena has become a whole lot more interesting.

Ian Jindal Update: good comment on how Google will get a return on its $1.65bn is on InternetNews.com.