At around 10/10/06 1:38 pm, raghu wrote:
> On 10/10/06, ravi <[EMAIL PROTECTED]> wrote:
>
>> I just don't get it, from a non-economist perspective. What is the value
>> of YouTube? It's not the content... it's user contributed and mostly
>> copyrighted material anyway that Google may have to abandon. There is no
>> eyeball lock-in. There is no technology barrier. It feels like a
>> decision out of the old .com days.
>
> Well Google is buying YouTube from the money they made from their very
> dot-com like IPO. If Google is worth a $140B market cap, YouTube is
> well worth the $1.65B price tag. Also the "No eyeball lockin, and no
> technological barrier" arguments apply equally well to eBay and
> MySpace.
>
I agree with your first part. The deal was an all-stock deal and Google
Money is probably about 10 to 1USD. Regarding eyeballs and technology:
neither eBay nor MySpace have earth-shattering technology. But they both
have lock in because: an auction site is best setup as a monopoly and
whoever gets there first/best wins. Once you have critical mass, things
like the seller rating and so on create content value. MySpace (from
what I can tell, since I am not a MySpace user) seems to work on the
same lock-in as AOL/AIM et al did: using the users' network to lock them
in. Can't connect to my MySpace buddy outside MySpace.
> Of course there are differences - arguably a critical mass
> popularity means a lot to community-oriented eBay and MySpace and less
> so for YouTube. Still being a frontrunner in a critical segment like
> online video delivery surely is worth something.
Right. So what is that worth? 1.65B? Also, I am not sure I would call
YouTube "video delivery" (hence the comments of that other overvalued
creature: Mark Cuban). Akamai could probably beat the pants off of
YouTube on delivery ... that is if YouTube is not using Akamai!
> And what is Google
> going to do with all that cash anyway, invest in oil futures?
They could tie their crazy, disparate set of services together. They
could hire UI designers and developers. They could write an OS ;-). Or
at least a browser. They could give it to me!!!
--ravi
