July 31st, 2006
One of these six companies will buy YouTube
All the buzz around video site YouTube indicates that the closely-held company could have a market value of around $1 billion.
Given those numbers, it is only natural to crystal-ball YouTube’s future: private, IPO, acquired, acquirer?
To me, there are only six candidates with the business model and deep pockets to buy YouTube whole. Let me count down these five, in order of suitability:
6- Adobe- This would be a stretch, but Adobe does make the Flash format that YouTube employs for most of their videos. Such a purchase would be a fantastic promotional platform for Flash, as well as Adobe’s suite of video editing tools.
5- Time Warner- AOL would be a great distribution platform, and YouTube videos could be integrated with other AOL content properties.
4- Sony-They are the premier company in the content distribution AND the video hardware space. Oh, and as does Time Warner, they also own a movie studio. Think of MySpace contests,with the winner getting short film rights.
3- Google- Google’s videos are receiving signficant promotion, and the addition of YouTube would help there as well. Also, consider what the integration of Google’s search utilities and YouTube content could offer.
2- NewsCorp.- I think of YouTube and MySpace as natural allies to add a video dimension to the world’s top social networking site. NewsCorp and Fox also have significant cross-platform media distribution as well.
But if I were YouTube and had offers from all of the companies I mentioned, here is the one that would make the most sense:
1- Yahoo!- One word. Flickr. They already have the blue-chip photo sharing site. I have to think many, if not most Flickr-posters have a digital camcorder as well. So why not? And Yahoo!., you could syndicate YouTube content as well!
Also-rans: Viacom, Microsoft, Apple.
But I still think Yahoo! would be the most logical acquirer.
What do you think?
Russell Shaw is an enterprise computing journalist, analyst and author based in Portland, Oregon. See his full profile and disclosure of his industry affiliations.
