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A customer base has value. Consider that Google bought YouTube for $1.65bn. There is little doubt that Google could build the necessary video streaming tech, bu
by pgt 8y ago
A customer base has value. Consider that Google bought YouTube for $1.65bn. There is little doubt that Google could build the necessary video streaming tech, but they still bought YouTube, and it was their best acquisition to-date.
- whymauri 8y agoI thought YouTube is still not profitable? Like it provides a lot of value for their larger, long scale strategy but is bleeding money short term? I'm no expert, I just see this narrative parroted all the time.
- SatvikBeri 8y agoAs far as I can tell, Google hasn't disclosed whether YouTube is profitable. What we know is that most analysts predict YouTube makes ~$10BN in revenue, is growing 30%-40% per year, and is valued at somewhere between $75BN-$150BN (much more than Google paid for it.) But those are just analyst predictions, it's very hard to tell when Google's not saying anything.
- linuxftw 8y agoThey bought youtube because their video service was a big flop. Google might have smart engineers, but their user experience leaves a ton to be desired IMO.
- prostoalex 8y agoOnly after Google Video has been around and failed to reach the critical mass that Google hoped for. Customer acquisition in ride sharing space is a fairly well-trodden path - start with a high promotional credit for signups/referrals, gradually lower those as desired metrics are met. I guess in that sense an acquisition makes sense when the target is priced below the cost of customer acquisition, but I doubt that is the valuation Lyft/Uber are hoping for.
- TheCoelacanth 8y agoSo less than a tenth of what Lyft would probably want them to pay and only a year and a half of what Lyft loses (only half a year of Uber losses). Google isn't going to buy Lyft's customers for $20 billion plus the $1 billion a year that those customers are costing Lyft to keep.
- smileysteve 8y agoLyft, Uber, and Taxis aren't as sticky as YouTube though, the majority of both drivers and riders readily use all 3 varying only on convenience. Google even promotes this by having the ride hailing part of maps. The scooter business amplifies this even further, very few users or charges have a strong preference to a single brand. While YouTube had advantage in content, Vimeo had targeted commercial content, but very low stickiness.
- B-Con 8y agoThey already had built it. Google Videos (was that it's name?) was a thing and I remember it being turned down not too far from the YT acquisition.