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YouTube Price Reasonable After All?

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March 16, 2007 – Comments (2)

Blodget chimes in on the price paid for YouTube. I wonder if he is he the best guy to turn to when it comes to analyzing Internet businesses?

Referring to the $1.7 billion acquisition, he says "This was a tiny tuck-in acquisition for a massive global behemoth.  It was a minor risk with a potentially huge payoff that the company was smart to take." 

While even a complete flop from YouTube would certainly not sink Google, what concerns me is whether Google will make more acquisitions like this in search of growth.

-Kopp 

2 Comments – Post Your Own

#1) On March 19, 2007 at 11:55 AM, ctmedic00 (87.27) wrote:

TMFKopp,

        I agree with you completely when you wonder if Mr. Blodgett is the best guy for that pick.  Certainly someone who has managed to recieve a lifetime ban from working in the securities industry has been making decent amount of noise about the industry.  It's like Pete Rose commenting on baseball... something is just not right. 

        I also wonder if GOOG will be searching for this kind of acquisition in the future.  Googles numbers are simply amazing so it's hard to doubt the wisdom of management but I wonder if youtube is really ready for great expansion.  To me I see youtube is ready for some scalping by various invaders rather than poised for exponental growth.  When you are king of the hill the only possibility is to get picked apart little by little or possibly tossed off the pile by someone coming in.  Viacom certainly has thrown the first stone and it's not likely to be the last.  I really love youtube and the new stock pitches are also depending on youtube but I have this feeling that there will be a bit of unwinding coming soon. 

        I think what matters here is what will GOOG do with youtube.  Where does it fit into the master plan.  As is youtube was probably at it's top and looking to jump the shark however in the right hands it has the potential to become something far greater than just a portal for videos (and a whole lot of copyrighted content).  I have to sit back and reseve my judgement for the next acquisition to determine what's next.  Once there is a pattern the commentary will be fast and furious.  Thanks for opening the conversation TMFKopp.

 

-Chris

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#2) On March 19, 2007 at 12:43 PM, TMFKopp (97.11) wrote:

I totally agree Chris.

To some extent when you're invested in a business you have to have trust in management, and with Google there is certainly a good team to get behind. My concern isn't necessarily over YouTube per se, but whether now Google starts thinking that it's ok to regularly pay this kind of price for an acquisition. 

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