Google and other suitors are seriously wooing YouTube - and willing to part with some serious cash to acquire the popular video-sharing site, according to various sources.
Google is in "serious talks" to acquire YouTube for $1.6 billion in cash and stock, the New York Times reports, citing sources who are involved in the negotiations. Microsoft, Yahoo, Viacom and News Corp. have apparently been among those recently paying visits to YouTube's headquarters.
Rumors of the talks were posted on TechCrunch Thursday night and picked up by the Wall Street Journal on Friday, the Independent writes, saying talks are at an early stage and a deal is uncertain.
Internet entrepreneur Mark Cuban is quoted by Internet News as saying "they'd be crazy" to buy YouTube, which is "going to get crushed" because of lawsuits. "Once you go commercial, once you have to monitor for copyright violations, your whole business model changes," Cuban said at an Online News Association conference Friday.
But Forrester Research analyst Josh Bernoff is quoted by the Financial Times as saying a deal would "make a strange sort of sense. Google has a weakness in…the community space…. They're beginning to lose opportunities to MySpace." He added that Google technology could help YouTube keep copyrighted material off the site.
TheStreet.com, too, argues in favor of an acquisition, saying Google would immediately boost its share of the online-video market to 56 percent from its current 10 percent. It adds that Google is capable of fixing the search kinks in YouTube - and deliver more relevant and less-annoying ads that current ones. Moreover, Silicon Valley execs and investors are cheering for "a big deal to ignite activity, whether it comes in the form of IPOs or M&As," the Street writes.
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According to Hitwise, in September YouTube's market share of visits was 4 times that of Google Video, and YouTube's average session time, 18 minutes 33 seconds, was double that of Google Video's 9 minutes 9 seconds. Google Video's demographics skew more male and older than YouTube's. Google is YouTube's second most important source of traffic (after MySpace). In September, 10.7 percent of YouTube's upstream visits came from Google, while MySpace accounted for 16.2 percent.
