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Monday’s mega-announcement changed everything. The balance of power in the search engine business world has again shifted precipitously in the direction of the Googleplex. Google now owns YouTube, by far the Internet’s most popular social, video-sharing application. The acquisition was obviously important to Google. It paid $1.65 billion worth of stocks for a 20-month old start-up that had previously existed on approximately $11 million in venture capital funding.
Rumours of the deal had been circulating all weekend, fueled by speculation that Yahoo and MSN were also interested in buying YouTube. Over the past few years, Google has made a habit of grabbing online properties its competitors were interested in, often entering into negotiations with acquisition targets after its rivals initiate talks. It opened the year snagging AOL away from Microsoft. In the middle of this year, it inked a lucrative ad distribution deal with the social networking site MySpace. Closing the year with a mega-deal its rivals desperately needed to remain vital and relevant is more than frosting on the cake, it is a volley of torpedoes aimed amidships.
