A happy marriage for YouTube and Google

Ashley Milne-Tyte Oct 10, 2006
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A happy marriage for YouTube and Google

Ashley Milne-Tyte Oct 10, 2006
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TEXT OF STORY

SCOTT JAGOW: Well, Google did it. Yesterday, the search engine bought one of the hottest websites out there. It’s paying $1.6 billion for the video site YouTube. Ashley Milne-Tyte reports.


ASHLEY MILNE-TYTE: $1.6 billion is a huge sum of money to pay for a company that doesn’t have much of a business model.

Molly Wood of CNet says Google’s purchase is a serious stamp of legitimacy for online video.

MOLLY WOOD: It just absolutely proves that this is the way people are going to consume video in the future.

Each company has something the other wants. YouTube gets millions of hits a day, about half the eyeballs of the entire online video market.

Meanwhile Google is more of an expert when it comes to handling site advertising.

Tim Bahairin of Creative Strategies says YouTube has done an impressive job of creating an online video brand but . . .

TIM BAHAIRIN: What they really need is someone to help them build and work with them on the ad revenue-based model. And from Google’s point of view what they really would like to do is jumpstart more people coming to the Google video site.

Right now, Google’s video site has just 11 percent of the market

In New York, I’m Ashley Milne-Tyte for Marketplace.

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