[mozza]

SAN FRANCISCO - The YouTube video-sharing website and Google internet giant sternly declined to comment Friday on reports that they were discussing a 1.6 billion dollar takeover by Google.

YouTube workers ejected a television news camera crew that made its way into the popular website's non-descript office in the heart of San Francisco.

"We do not comment on rumor and speculation," said Google spokesman Jon Murchinson.

The young website was in the spotlight as the result of a Wall Street Journal report citing an inside source as saying Google was courting YouTube to the tune of 1.6 billion dollars.

The discussions between the companies remained "delicate" and could be stopped, the daily newspaper quoted the source as saying.

The report reinforced rumour that circulated in financial markets and the weblogs of high-tech industry watchers.

On the TechCrunch weblog, Michael Arrington claimed to have received an e-mail from "a very good source" indicating that Google's acquisition of YouTube was in its final stages.

YouTube soared to online popularity after its launch in February of 2005.

The company claims that more than 100 million videos are watched daily by visitors to the free website, which features content provided by users.

The challenge for YouTube has become finding ways to make money off its broad range of online visitors, according to analysts.

By purchasing YouTube, Silicon Valley based Google would be able to apply its proven prowess for generating revenue through online advertising.

It would also be a formidable alliance of two of the Internet's major video sharing sites.

Source

[Ajay]

Isn't this all a rumour?

[Eric]

Originally Posted by Ajay

Isn't this all a rumour?

So far yes. Fox News did a story on it today.

[Ajay]

I'm not sure if Google will actually end up doing this. Especially since YouTube does have copyright implications in the long run.

Then again, they already have Video Search!

[mozza]

I don't know if i'm right about this. But i feel that youtube's the greatest competitor to Google Video so maybe they're buying out Youtube to kill them off? Or just to use their tech and dominate the Online Video community.

[Ajay]

Actually Google Video is a small competitor to YouTube

[mozza]

Originally Posted by Ajay

Actually Google Video is a small competitor to YouTube

Google Video is small compared to Youtube, but Google wants to make it bigger, so maybe that's the rationale for the acquisition? Just a wild guess :)

[Eric]

Keep in mind that Google knows exactly how much YouTube makes from Adsense. They also have the Adsense stats so they have a fairly good idea of the traffic as well.

Google knows what it's doing.

[mozza]

I just stumbled across this article by Shoemoney that discuss about this rumoured takeover. Very interesting read and a good analysis imo

10 Reasons Why The Google YouTube Deal Makes Sense

[ScottHughes]

Google also saves all the money it was paying out to YouTube for AdSense. That has to figure into the finances. Now Google can take all the profits from YouTube. So, Google will make more money from YouTube, than YouTube ever could have.