The Big $ Deal for YouTube. What the Sale to Google will mean for you.

YouTube sold for $1.65B - To remain "independent".

The body of this article is taken From the NY Times Evening Edition - 10/9/06

By ANDREW ROSS SORKIN and JEREMY W. PETERS

Google announced this afternoon that it would buy YouTube, the popular video-sharing Web site, for stock that it valued at $1.65 billion.
Google beat out a number of other YouTube suitors, including Microsoft, Viacom, Yahoo and the News Corporation. By successfully negotiating the deal, Google has once again proved that it is the Internet’s dominant player.

Under the terms of the deal, YouTube will retain much of its identity and will keep its name and its office in San Bruno, Calif., more than 25 miles from Google’s headquarters in Mountain View.
Chad Hurley, YouTube’s co-founder and chief executive, has repeatedly said he would prefer for his company to remain independent. Asked about such comments in a conference call with Wall Street analysts and investors held late this afternoon, Mr. Hurley said his company did want to stay independent, adding that “by working with Google, that’s still the case.”

Steve Chen, also a YouTube co-founder, said, “It is hard for me to imagine a better fit for two companies,” both in terms of technology and company culture.

The rise of YouTube has been meteoric. The Internet start-up has been in operation for less than a year, yet it already has an estimated 50 million users worldwide.

The acquisition of the privately held YouTube will enable Google to thrive in one area of the Internet where it has so far failed to gain footing. According to Hitwise, which monitors Web traffic, has the lion’s share of online video traffic. YouTube has a 46 percent share, MySpace has 23 percent and Google Video has 10 percent.

The deal will also greatly benefit YouTube, which would have Google’s vast resources to help it navigate some sticky legal issues. Copyrighted videos often find their way onto YouTube’s pages despite efforts by the site to prevent it. YouTube could also benefit from a Google alliance as it tries to develop new software to prevent copyright infringement.

These copyright issues have led some in the technology industry to compare YouTube to Napster, the song file-sharing service that eventually had to shut down after a protracted legal fight with the recording industry.

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Earlier today, YouTube signed three separate deals that should provide some legal protection from copyright infringement claims. One of the deals will allow YouTube to broadcast CBS programming. In addition, YouTube reached agreements with the Universal Music Group and Sony BMG Music Entertainment that will allow it to broadcast music videos.

IMPACT OF THE DEAL
WHAT I HAVE TO SAY..... by Ryan

Very impressive. YouTube used the knowledge of their deal later today with Google to maneuver and broker protective use contracts with communications outlets - Why? To protect themselves. But why would these company's surrender their future positions in litigation against YouTube? That's simple - to get in on today's landmark deal with Google. If you had a deal in place today with You Tube.... You had a deal with Google at the end of the day. Not too shabby.
YouTube's protection and licensing contacts signed today are ultimately a very good thing for all users. It is true there will inevitably be more oversight by corporate oversight, but such is inevitable with the trading of hands.
The deal insures that YouTube stays in business through the sale - with new rights to rebroadcast licensed material for the immediate future. The licensed material is a huge portion of the traffic generated on YouTube. This demand reinforces the platform of popularity for this startup - a home for independent material, spoofs, and inspired artists to do their worst - and their best work, online.
If YouTube was up for sale, I'm glad Google ended up the buyer. To the users - the people like me who go on youtube daily... I think we're okay.