Google and the YouTube deal

So, Google has bought YouTube for $1.65 billion. Wow! In case you don’t know, YouTube is an online video sharing web site. You can post your home videos up there and anyone can have a peek at them. So why is Google that interested in YouTube? Advertising. Pure and simple. YouTube is only 18 months old, but already 100 million videos are watched every day – that’s 1,157 every second…! Google is arguing that it allows them to organise and deliver “the world’s information”. They also suggest it will allow them to deliver a “more comprehensive entertainment experience”. What they really mean is they can deliver more adverts. Google’s only source of income is advertising. Unless they can distribute online video, Google will be left only with text and graphics based advertising. In order to deliver video adverts it badly needed a proper distribution channel for such material. The YouTube deal provides just what they need. You can expect to see entrepreneurs jumping on the bandwagon fairly soon, producing videos with little content, but lots of adverts.

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