Warner, Google and YouTube’s huge deal
Internet giant Google Inc announced Monday that it had reached a deal to buy web video newcomer YouTube Inc for 1.65 billion dollars – the biggest purchase in its history.
The transaction – widely expected after rumours of advanced negotiations began circulating late last week – marks another spectacular Silicon Valley success story. YouTube was founded in a Silicon Valley garage in February 2005 and has leapt to a commanding position in the internet video market, with technology that allows anyone with a web connection to post, share and view videos online.
Google said that YouTube would continue to operate independently, but that the companies would focus on providing a better, more comprehensive experience for users and new opportunities for professional content owners to distribute their work to reach a vast new audience.
The announcement of a deal followed independent statements from both companies earlier Monday that they had signed separate agreements with Universal Music Group, Sony BMG, Warners Music and US television network CBS, to showcase music videos and other short form content on their sites in exchange for a share of advertising
revenue.
The acquisition means that Google will likely become the second most visited site on the Internet with 101 million unique visitors, behind Yahoo Inc’s 106.7 million visitors but ahead of Microsoft’s MSN Internet division’s 98.5 million, according to Nielsen Net Ratings.
Based on an article by Deutsche Presse-Agentur.