media points finger at google presented by: jennifer hocking and nikhil gupta february 13, 2007
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Correct Answer: D) YouTubeTRANSCRIPT
Media Points Finger at GooglePresented by:Jennifer Hocking and Nikhil Gupta
February 13, 2007
Google recently purchased which company for $1.65 billion dollars?
A) MySpaceB) FacebookC) America OnlineD) YouTubeE) Ebay
How many of YouTube’s founders attended the University of Illinois?
A) 0B) 1C) 2D) 3E) 4
Correct Answer: C) 2
Steve Chen and Jawed Karim Chad Hurley
Google Takes the Plunge
October 9, 2006$1.65 Billion Google: search engine and designer of
innovative advertising modelsYouTube: online video entertainment
Risk
YouTube still unprofitable Counting on future traffic and advertising
Most expensive purchase 8-year history Last year only spent $130.5 million on 15
small companies Lawsuits, copyright issues Staying power?
Napster Comparison
Why YouTube? Greater ability to capture online video and social
networking advertising market Competitive edge against news corp.
News Corp. owns MySpace MySpace controls 30% of video sharing market
Ability to integrate video into search results All stock deal
$500 million of $1.65 billion held in escrow (not paid to shareholders) for future copyright infringement lawsuits
Online Video Market Share
YouTube – 47% MySpace – 20% Google – 11%
0.00%5.00%
10.00%15.00%20.00%25.00%30.00%35.00%40.00%45.00%50.00%
YT Google MS
YouTubeGoogleMySpace
Opportunity to become world’s largest video server network New era of TV, moving towards internet
Increased popularity of site 100 million clips watched per day 65,000 new videos uploaded per day 20 million visitors per month
Common financial backing through Sequoia Capital Early Google investor and 30% YouTube
shareholder
Other Pros
Recent Growth
From 2005-2006, the number of visits increased by the millions.
New Music PartnershipsUniversal Music GroupCBS Corp.
New copyright protectionSony BMG Music EntertainmentWarner Music Group
Google Controversy
Recent accusations from media companies News Corp., Viacom, Sony, Walt Disney,
General Electric, NBC Universal, and Tim Warner
Measures to Prevent Piracy
Removal of ads that companies object toApproved advertisersNew guidelines to monitor for key wordsTraining of employees to scan for ads
selling piracy
Based on what you have learned about the risks associated with YouTube, do you believe this purchase will make Google a better investment?
A) YesB) NoC) Not sure
On Friday, October 6, 2006, Google shares closed at $420.50 with 304.36 million shares outstanding. After the news of the YouTube acquisition, Google shares closed at $427.30 on Friday, October 13, 2006. How much did the Google market cap increase by the end of the week?
A) $1.67 billionB) $1.84 billionC) $2.07 billionD) $2.32 billion
Answer: C) $2.07 billion
Worth the risk?
Friday Oct. 6th, 2006 Google shares closed at $420.50 per share 304.36 million shares outstanding Market Cap= $127.983 billion
Friday Oct. 13th, 2006 Google shares closed at $427.30 per share Market Cap= $130.05 billion Difference equals $2.07 billion > $1.65 billion
Questions?