In August I predicted that YouTube would be roasted by Christmas.

So, I read the news that Google acquired YouTube for $1.6b while chewing on some humble pie. .

So what happened? Where did I go wrong?

Since writing that post I felt pretty confident with the news flow and additional comments from informed people like the illustrious (and boisterous) Mark Cuban who said it would be moronic to buy YouTube..

I will stick to my analyses of YouTube’s situation but admit that I failed to see one, rather intricate, way out.

I overlooked the Google Distortion Field. Today Google has a 100 strong legal team who are masters in copyright fights. Tactically, by owning YouTube’s eyeballs they are further consolidating their leadership of the paid link advertisement market. They are protecting their money-making franchise from Microsoft, Yahoo and AOL. They alone could buy YouTube and shoulder the implications.

Furthermore, what really brought a smile to my face was their cunning plan to bring some media companies into the deal. It appears that the morning of the day that YouTube were going to sell to Google, they offered Universal Music Group, Warner Music Group and Sony BMG (and maybe others we don’t know about) the opportunity to invest in YouTube. Wow. In one move YouTube (and Google) rewarded these media companies for not suing them to date with an estimated $50m windfall and reduced their legal liability going forward.

Kudos to Chen and Hurley!

tags: YouTube, Google, video

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