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Google bought YouTube for $1.65B when YouTube didn't have business model. It was critiqued a lot because of this, but it established Google as a dominant player

Google bought YouTube for $1.65B when YouTube didn't have business model. It was critiqued a lot because of this, but it established Google as a dominant player in video space and it's ripest fruits might be seen in coming years when media consumption moves more and more to mobile. I grant that $1B sounds a lot for Instagram and it is harder to see similar commercial value in photos than in videos. My personal take is that in addition to friend connections, already posted photos could be the strongest lock-in for users that Facebook has against future competitors.

knowsnothing613 15y ago
yeah, and Yahoo bought Flickr for hundreds of millions. And Flickr never became a profit center for yahoo. Now, Yahoo is laying off thousands of workers, and is close to dead poool, because of all its malinvestment in web1.5 (flicker, geocities, delicious, etc). Video has a higher value proposition than photos. Look @ how hard flickr has struggled turning photos into a sustainable business model. I'm comparing apples to apples. You're comparing apples to oranges.
- lucasgonze 15y ago
  Flickr was in the tens of millions, on the order of $30 million. That was the blog buzz around the price, anyway.
  - tirrellp 15y ago
    Gonze! How are you my man?!
cpeterso 15y ago
YouTube has a business model now, but is it a profitable business unit? (I'm not trolling; this is a serious question about business models.)
unreal37 15y ago
Trust me, Youtube is very profitable. Major multi-national brands have to pay $100,000's in Google Adword purchases to have their own branded channel. And if you want to change the look of your channel? Pony up another $100K.
- zbuc 15y ago
  It is very profitable now, however it wasn't when the purchase was made -- therefore it was a wise decision.
- avree 15y ago
  YouTube just recently turned profitable in the last two years. It was hugely unprofitable with an unproven business model at the scale at which it was bought.

knowsnothing613 15y ago

yeah, and Yahoo bought Flickr for hundreds of millions. And Flickr never became a profit center for yahoo. Now, Yahoo is laying off thousands of workers, and is close to dead poool, because of all its malinvestment in web1.5 (flicker, geocities, delicious, etc). Video has a higher value proposition than photos. Look @ how hard flickr has struggled turning photos into a sustainable business model. I'm comparing apples to apples. You're comparing apples to oranges.

lucasgonze 15y ago
Flickr was in the tens of millions, on the order of $30 million. That was the blog buzz around the price, anyway.
- tirrellp 15y ago
  Gonze! How are you my man?!

cpeterso 15y ago

YouTube has a business model now, but is it a profitable business unit? (I'm not trolling; this is a serious question about business models.)

unreal37 15y ago

Trust me, Youtube is very profitable. Major multi-national brands have to pay $100,000's in Google Adword purchases to have their own branded channel. And if you want to change the look of your channel? Pony up another $100K.

zbuc 15y ago
It is very profitable now, however it wasn't when the purchase was made -- therefore it was a wise decision.
avree 15y ago
YouTube just recently turned profitable in the last two years. It was hugely unprofitable with an unproven business model at the scale at which it was bought.