Google buys YouTube in US$1.65b stock deal
Posted: 10 October 2006 0444 hrs
SAN FRANCISCO - Google on Monday announced a 1.65 billion dollar stock deal to buy hot young video-sharing website YouTube.
"The YouTube team has built an exciting and powerful media platform that complements Google's mission to organize the world's information and make it universally accessible and useful," Google chief executive Eric Schmidt said in a statement.
"Together, we are natural partners to offer a compelling media entertainment service to users, content owners and advertisers."
YouTube soared to online popularity after its launch in February 2005. The company claims that more than 100 million videos are watched daily by visitors to the free website, which features content provided by users.
"Our community has played a vital role in changing the way that people consume media, creating a new clip culture," said YouTube co-founder Chad Hurley.
"By joining forces with Google, we can benefit from its global reach and technology leadership to deliver a more comprehensive entertainment experience for our users and to create new opportunities for our partners."
YouTube would continue to operate independently with its headquarters in San Bruno, California, after the acquisition is complete, according to Google. All of YouTube's 65 employees were to remain with the company.
In unofficial Silicon Valley tradition, YouTube was launched on its meteoric rise from a garage. It announced a first round of funding of 3.5 million dollars from Sequoia Capital in November of last year.
Google was to pay for YouTube with shares of its own high-flying stock.
Analysts have touted a Google purchase of YouTube as a symbiotic alliance.
By purchasing YouTube, Silicon Valley based Google would be able to apply its proven prowess for generating revenue through online advertising.
YouTube would provide Google traction in the online video-sharing market, where Google's own service of that kind has failed to gain traction.
- AFP /ls
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