Is YouTube worth monetization?
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Today the blogosphere is awash with news that Google is in talks for acquisition of YouTube, reports the BusinessWeek. While each one of us have their own reasons to consider this not to be news, I would like to ask whether YouTube is really worth the estimated takeover price of $1.6bn. IMHO if Google buys YouTube for such a colossal figure, this is going to be a bit of a gamble with their money. The fact remains that YouTube has not until today implemented a culture of playing ads before videos are displayed. It is also a fact that YouTube receives upto 20m unique visitors per month. But my point of contention would be that a sudden change of the status quo by Google (if they indeed buy YouTube) video ads might drive away a substantial of visitors. There are other companies offering web video clips such as Grouper.com (bought recently by Sony for $650m), Gotuit.com (Gotuit Media) among others.
Google advocates for an entrepreneurial spirit for the devout at heart–publishers. From my experience with PPC providers, there nothing more difficult than monetizing video web content sites.
In the past YouTube has been linked to be involved in takeover talks with other web giant companies such as AOL (Time Warner), Viacom and Yahoo.
Just to give you an oversight into the video advertising dollars:
“The advertising dollars U.S. social networking sites collect is expected to grow from $280 million this year to $1.9 billion in 2010, according to estimates by research firm eMarketer”.