Google buys YouTube for $1.65 bn

Web search giant Google will buy the enormously popular video clip site YouTube, following a flurry of deals with a number of media firms.
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The move is in line with an emerging trend which involves community based ‘sharing’ sites being absorbed into much larger corporations following News International’s acquisition of MySpace and an alleged pact between Microsoft and video searching site Blinkx.

Critics of YouTube maintain that the site is unlawful in its conception, facilitating in some cases the uploading of entire TV programmes without regard for copyright infringement. However Google’s involvement, and more specifically the rush of distribution deals with media companies that have gone on in the lead up to the deal, will be seen as a move to legitimise the site and pre-empt any legal action from copyright lawyers.

"The YouTube team has built an exciting and powerful media platform that complements Google's mission to organize the world's information and make it universally accessible and useful," said Eric Schmidt, Chief Executive Officer of Google. "Our companies share similar values; we both always put our users first and are committed to innovating to improve their experience. Together, we are natural partners to offer a compelling media entertainment service to users, content owners and advertisers."

However, in the wake of the deals with the likes of Sony, Universal Music and CBS, users could find themselves inhibited as to what they can upload and download – a result which some will argue dissolves the whole point of a site such as YouTube in the first place. If this happens, it would seem reasonable to assume a fresh batch of community led video sharing sites will crop up to fill the gap left by YouTube's big business makeover – much like the swarm of mp3 download sites that emerged after Napster's neutering in court several years ago.

YouTube founders Chad Hurley and Steve Chen started the operation less than two years ago from a garage in Silicon Valley, with the humble aim of developing a vehicle to show clips of a dinner party to some friends. The site’s traffic level is now in the region of 72 million individual users a month watching 100 million clips a day – the sheer scale of which has led to the sites huge $1.65 billion valuation.

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